Kenya’s private sector activity in September expanded at the fastest pace in 6 months following peaceful general elections.
A private survey showed that this comes amid an increase in demand for consumer goods, leading to a rise in new business volumes after five months of declines.
Data released by S&P Global on Tuesday showed that Purchasing Managers’ Index (PMI) services rose to 51.7 from 44.2 recorded in August 2022, marking six months high.
A print above 50 is considered an expansion, while below 50 is taken as a contraction.
“Despite improving slightly, the outlook for future activity remained subdued in September amid ongoing concerns surrounding the cost-of-living crisis.”
“Expectations at Kenyan firms for the next 12 months remained one of the worst on record, with just 12% of panellists predicting output to expand. Job creation was weak, with employment numbers rising only fractionally,” the survey indicated.
“A second round of inflationary pressure could persist into 2023 due to higher electricity prices, higher domestic fuel pump prices and the excise duty hike from October. This could restrain consumer spending in the near term,” Mulalo Madula, Economist at Standard Bank, commented.
Similarly, the NCBA Monthly Economic Report—September 2022 also disclosed that despite the general elections largely being non-disruptive, the need for caution among the business community resulted in a sharp decline in output.
“The lull could extend into Q4-2022 as the new government regime takes office and investors await the announcement of its policy priority areas.”
