NAIROBI, Kenya, Nov 3 – Firms in Kenya were hit last month by inflationary pressures due to the high cost of fuel and currency weakness.
An analysis by the Stanbic Bank and American analytics firm S&P Global November PMI report shows.
October PMI was at 46.2 percent, which is below the reading of 50 percent that signals an improvement in business conditions.
“Around 46% of monitored firms reported that total expenses had increased from September, driven by a further uplift in fuel prices and associated transport costs,” the analysis reads.
“In addition, companies noted that ongoing currency weakness and increased tax burdens had added to costs,” it adds.
“In order to maintain sufficient margins, Kenyan companies also reported an unprecedented increase in selling prices in October, with the rate of inflation climbing above the previous high in mid-2022.”
Companies also reduced spending on inputs and labor last month than in September, the PMI continues.
“Purchasing activity also dropped, albeit only modestly. Meanwhile, there was a slight improvement in vendor performance, after lead times had lengthened slightly in the previous month.”
Expectations in the next 12 months remained muted, with companies showing a modest degree of positivity that was little changed from September.
“That said, optimism was still stronger than the record low in April,” it says.
“Hopes that sales and activity will pick up contributed to a renewed increase in firms’ inventory holdings.”
