NAIROBI, Kenya, August 5 – Kenya’s private sector activity shrank for a third month in a row in July, new data shows, coming on the back of protests, rising price pressures and weaker order inflows.
Latest Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) stood at 46.8 last month, down from 48.6 in June.
A PMI below 50.0 indicates business activity deterioration, while above it signals an improvement.
“Business activity fell at the strongest pace in a year in July, with 38% of survey respondents signalling a downturn over the month (versus 17% that saw a rise),” Stanbic said in a statement.
“That said, the decline was largely concentrated in the manufacturing and services sectors, conflicting with higher output across agriculture, construction and wholesale & retail.”
“Businesses reportedly curbed their output because of lower sales volumes, cash flow problems, political unrest and accelerating inflationary pressures.”
Similarly, total new orders fell on reduced customer spending power, higher prices and political protests leading to lower footfall.
“The Stanbic Kenya PMI suggests that private sector output and new orders weakened for a third month in a row, reflecting the negative impact that recent protests have had on businesses,” Christopher Legilisho, Economist at Standard Bank, stated.
“It also reflected harsh economic conditions crimping consumer spending, more so in services and manufacturing.”
However, agriculture, construction and wholesale and retail sectors expanded, stabilising employment conditions.
