Contraction in Kenya’s Private Sector Activity Lowest Since April 2021-PMI
Kenya’s private sector activity contracted at the fastest rate for the third month in June, according to the S&P Global Kenya Purchasing Managers’ Index (PMI).
The PMI slid to 46.8 in June from May’s 48.2. The 50.0 mark separates growth in activity from contractions.
From the survey, firms commented that rising price pressures had weighed on client demand, while weaker cash flow and the upcoming elections were also noted as contributing factors.
“Lower domestic demand along with the increase in input prices, lower cash flows and the upcoming elections forced firms to scale back on output sharply,” said Kuria Kamau, fixed income and currency strategist at Stanbic Bank.
” While the increase in input prices slowed for the second consecutive month, it remains at near record rates with firms pointing to higher fuel prices and supply shortages as the main drivers of the high inflation. Output prices also rose at an unprecedented rate as firms passed on the higher input prices to customers to avoid reporting losses.”