NAIROBI, Kenya, Dec 5 – Private sector activity in Kenya declined in November, a new report shows, amid high inflation that suppressed demand and created cash flow challenges.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) dropped from 46.2 in November to 45.8 in October.
While reading above 50.0 signals growth in business activities, reading below it indicates contraction.
“Driving the downturn in operating conditions was another historic increase in business costs during November,” the Stanbic Bank Kenya PMI read.
“After reaching the highest level in the series history one month ago, the rate of input cost inflation remained marked and was the second-fastest on record, with firms largely relating this to a further depreciation in the shilling against the US dollar, higher taxes and greater fuel charges.”
Reductions in output and new orders led to quicker falls in purchasing and employment at Kenyan firms in November, the data adds.
“Most notably, staff numbers dropped at one of the sharpest rates on record, with stronger falls only registered during the first COVID-19 lockdown,” it says.
“Lower input purchases helped to shorten delivery times for the second month running, although the improvement was only slight.”
