The February Stanbic Group Purchasing Manager’s Index (PMI) indicates the first positive growth in Kenya’s private sector in six months.
The PMI climbed to 51.3 from 49.8 in January, exceeding the 50-point growth threshold for the first time since August 2023.
“There was a notable expansion in private sector activity in February, with output increasing in agriculture, manufacturing, and services. However, construction, wholesale and retail activity slipped. Firms noted improved consumer demand as assisting higher output and new orders,” Christopher Legilisho, an economist at Standard Bank, commented.
“Increased new orders spurred inventory stocking, with some firms wanting to avoid product shortages during the year. However, expectations for 2024 remain subdued; the index for future expectations hit its weakest level on record.”
During the period under review, inflation rates dropped to 6.3% in February from 6.9% in January, as reported by the Kenya National Bureau of Statistics (KNBS).
In addition, private-sector employment levels rose, exceeding January’s growth rate.
However, the construction, wholesale, and retail sectors struggled with limited cash flow and lower consumer spending, causing a decline in sales.
According to the PMI, while February showed growth, the report expresses uncertainty about its long-term viability.
