Kenya’s Private Sector Pulse climbs to a 26-month high
THE health of the private sector in Kenya in March rose to a 26-month high since January 2016. Output growth quickened to the fastest rate since the inception of the survey in January 2014. Meanwhile, the rise in new orders accelerated to the sharpest since December 2016, underpinned by a survey-record rise in new export orders. Reflecting improved demand conditions, job creation quickened to the fastest since last May. On the price front, input cost inflation was sharp despite softening from the preceding month. “The Stanbic PMI continued to show an improvement in business conditions in March. Indeed, a survey record rise in output since data collection began back in Jan 2014, primarily spearheaded purchasing activity. Moreover, recovering economic growth in key trading partners such as Uganda as well as the growing consensus that the interest rate capping law will either be significantly modified or abolished, should bode well for Kenya’s private sector over the better part of this year.” Jibran Qureishi, Regional Economist E. A at Stanbic Bank The seasonally adjusted PMI rose from 54.7 in February to 55.7 in March. This reflected the sharpest improvement in operating conditions since January 2016. Notably, the performance of Q1 2018 was the strongest recorded in two years.
Central to the upward movement in the headline index was another rise in business activity during March. Moreover, the rate of expansion accelerated to the sharpest since the series began in January 2014. According to panelists, favorable economic conditions and greater inflows of new work were the key factors behind output growth.
In line with the trend for output, new work at Kenyan private sector firms increased for the fourth consecutive month during March. Moreover, the rate of expansion quickened to the sharpest since December 2016, partly reflecting a survey-record rise in new export orders. Panelists also attributed higher order book volumes to a higher customer turnout and improved demand.
A woman harvesting tea in Kenya East Africa’s largest economy.