Increased demand for new orders in the domestic and foreign markets drove up Kenya’s private sector growth to a 10-month high of 54.3 in June compared to 51.3 in May.
The monthly Purchasing Managers Index (PMI) by Stanbic Bank further attributed the growth to an easing of cash flow over the past few months, with the private sector lending rising to 3.2%.
Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
“Alongside the sharp increase in new orders, firms stated that new government spending plans should help business growth over the year. Many panellists also reportedly intend to open new branches in the near future,” the survey said.
Jibran Qureishi, Regional Economist E.A at Stanbic Bank said this reflected the upbeat sentiment from private sector firms mainly due to the government releasing payments owed to both contractors and suppliers as well as VAT refunds.
“Furthermore, the pledge by the President at the Madaraka celebrations to ensure that containers are cleared quicker at the port while the commitment to clear private sector arrears in the FY2019/20 outlined in the budget speech, should underpin economic activity if implemented in the second half of 2019.”