NAIROBI, Kenya, Mar 5 – Kenya’s private sector has in February seen the greatest improvement in operating conditions since April 2016 according to Stanbic Bank’s Purchasing Managers’ Index.
The index registered a score of 54.7 in February compared to 52.9 in January supporting an improved business trend where production and orders have improved sharply since September 2017 where the sector saw a contraction.
47 percent of the 400 Purchasing Executives surveyed reported greater business activity which they linked to higher inflows of new work and stronger underlying demand conditions.
The index reports that the increased output has seen firms boost their staffing levels at the strongest pace in nine months.
Stanbic Bank Regional Economist Jibran Qureishi says the services and agriculture sectors are expected to have a strong performance in 2018.
“Of course, a key boost to the economy could also transpire in the event that there is a revision to the interest rate capping law over the course of the year which will subsequently begin to improve the flow of credit to the private sector and assist in boosting productive capacity,” said Qureishi.
Despite growing transportation costs, currency volatility and raw material shortages, purchase price inflation intensified to the strongest since March 2014.
“In turn, this reportedly led firms to increase their average selling prices to pass on higher cost burdens to customers,” states the PMI survey.
Levels of production and orders are usually an indication of economic activity with a record of above 50 points indicating improving private sector conditions.