Private sector activity highest in over one year

NAIROBI, Kenya, Mar 5 – Kenya’s private sector activity rose to the highest level in over a year last month on the back of cooling inflationary pressure as well as an increase in new orders.

The latest data from the Stanbic Bank Kenya Purchasing Manager’s Index (PMI) shows that the country’s PMI in February went up to 51.3 from 49.8 in January.

While a PMI below 50 indicates a downtick in business activities, the figure above shows growth.

“There was a notable expansion in private sector activity in February, with output increasing in agriculture, manufacturing, and services,” Christopher Legilisho, economist at Standard Bank, said.

“Increased new orders spurred inventory stocking, with some firms statedly wanting to avoid product shortages during the year,” Legilisho added.

“On the pricing front, firms noted both input and output price pressures easing due to moderating purchase costs, fuel prices declining, and the shilling appreciating during February. Staff costs were flat in February, although staffing levels increased for a second month running.”

The Economist nonetheless added that construction, wholesale, and retail activity slipped.

“However, expectations for 2024 remain subdued; the index for future expectations hit its weakest level on record.”

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