Kenya’s private sector saw a modest improvement in operating conditions in October, as activity levels expanded and employment increased, a survey by the Stanbic Bank Kenya revealed on Tuesday.
The survey indicates the Purchasing Managers’ Index surged marginally to 50.4 from 49.7 in September. “The Reading signaled a renewed but marginal upturn in the health of the private sector, with output, new orders, and employment all moving into expansion.” the survey reported.
Activity levels increased for the second time in three months against the backdrop of rising sales, greater client interest, and increased workforce stabilization. However, many businesses continued to struggle with rising costs, tough economic conditions, political uncertainty, and cash flow constraints. The modest increase in operating levels led to a slight increase in employment.
Sector data indicated expansions in the construction, agriculture, wholesale, and retail sectors while manufacturing and services decreased.
Purchasing efforts increased, leading to the most significant uptick in inventories since August last year. “Input cost pressures remained mild, triggering a slight increase in average prices charged.
Businesses stocked more inputs in anticipation of new customers. Inventories rose at an improved pace that was the fastest in over a year.
The survey also reports a rise in confidence regarding activity in the upcoming year, mainly driven by new outlets, greater investment, and reoriented marketing strategies.
Despite the robust purchasing activity and increased job creation, Kenya’s private firms continue to experience a mild rate of input cost inflation. Tax payments and higher material prices drove expenses up for several firms.
The risk in Kenya’s PMI signals economic resilience amid the broader economic and geopolitical challenges.
