NAIROBI, Kenya, Aug 9 -Business confidence in the private sector improved to a 5 month high in July, a new report has shown.
According to the Purchasing Manager’s Index by Stanbic Bank, a third of businesses that were surveyed provided a positive outlook for the next 12 months.
Several firms cited plans to open new branches and even increase their advertising.
The overall degree of optimism remained some way off the survey’s long-run average.
Comprehensively, the survey revealed that growth momentum in Kenya’s private sector slowed again at the start of the third quarter of the year, as businesses reported weaker expansions in output, new orders, employment and purchasing.
The survey also reveals that cost inflationary pressures rose to a 16-month high as tax changes resulted in a sharp uptick in purchase prices.
As such, the headline index fell for a second straight month from 51 in June to 50.6 in July, to indicate only a marginal improvement in operating conditions across Kenya’s private sector.
“Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration,” the survey revealed.
Commenting on the July survey findings, Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank said domestic demand improved by the second slowest pace since the lifting of public health restrictions after the first wave of pandemic, with some firms reporting a drop in customer numbers.
He added that firms in agriculture, construction and services witnessed an increase in demand and output while those in manufacturing and trade saw declines.
