NAIROBI, Kenya, Nov 4 -Kenya’s private sector activity grew rapidly in October, Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) revealed after the index rose to 51.4 in October from September’s 50.4.
The rise was partly aided by the lifting of COVID-19 containment restrictions which saw the output growth strengthen for the first time in five months as new businesses continued to grow.
The 50.0 mark separates growth from contraction inactivity.
The survey revealed that in October, “new business volumes continued to rise at Kenyan firms, extending the current run of growth that began in May due to a greater customer spending as cash flow and economic conditions improved.”
“There was a particularly robust rise in sales across services firms, but demand fell in the agriculture and construction sectors and was unchanged in manufacturing,” the survey revealed.
Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank said the improvement in domestic demand was driven by increased client spending primarily in wholesale and retail trade,”
While Kenyan companies hired additional workers for the sixth month running in October, the survey revealed that the pace was slower than September’s which had registered the highest rate since January as some respondents cited delays in filling open positions.
“Employment levels were raised for the sixth month running as firms looked to boost overall capacity. Notably, though, the rate of job creation slowed and was only modest, as businesses continued to project a relatively subdued outlook for future activity amid uncertainty over how the pandemic will impact spending decisions,” the survey revealed.
Higher employment was recorded in the agriculture, construction and services sectors in October, whereas manufacturers saw hiring growth weakened to a modest pace as firms continued to signal uncertainty surrounding the economic recovery from the pandemic.
