Kenya’s economic activity continued to ease in July as businesses relaxed their expansions in output, new orders, and employment during the month.
Stanbic Bank Kenya’s Purchasing Managers Index (PMI) fell for the second straight month in July. The PMI dipped to 50.6 from 51.0 in June, showing only a marginal improvement in operating conditions across Kenya’s private sector.
“Economic activity increased marginally in July from the previous month. Domestic demand improved by the
second slowest pace since the lifting of public health restrictions after the first wave of pandemic, with some
firms reporting a drop in customer numbers,” said Kuria Kamau, Fixed Income and Currency Strategist
at Stanbic Bank.
Output, new orders and employment indices, all fell to threemonth lows according to the Stanbic Bank survey. Businesses reported slow sales growth and therefore held off buying new inputs.
The price of imported goods rose sharply due to changes in the tax system. Additionally, higher fuel costs and input shortages led to the quickest rise in input prices since March 2020 according to the Stanbic report.
Even with the elevated price of goods, business confidence improved in July. Nearly a third of the businesses gave a positive forecast for output over the next 12 months. A few companies revealed plans to open new
branches and increase their advertising.
Also read: Kenya’s Economic Activity Picks Up in June