According to Stanbic Bank Purchasing Managers’ Index (PMI™) data released on Thursday, Kenya’s private sector fell to a four-month low of 52 in October from 53.5 posted in September, signaling a slowdown in private sector growth, and was close to the record low seen in June (51.5).
“The PMI fell to a four month low in October as domestic demand evidently seems to have cooled off. New export orders rose at its fastest pace in six months, hence the fall in output was clearly related to conditions in the domestic market,” said Jibran Qureishi, Regional Economist E.A at Stanbic Bank.
“We remain cautious about agriculture output over the coming months owing to weather reports of uneven rainfall in the key food growing counties. Moreover, the slowdown in private sector credit growth also poses as a downside risk to the promise of the private sector.” he said.
Broadly stable charges reflected efforts at some firms to stimulate demand, although other companies raised their selling prices amid rising costs.
The rate of expansion in output was modest and in line with the overall improvement in business conditions. Activity had risen at the fastest pace since February during September, but the latest increase was the least marked in four months. New business rose at a comparatively sharp pace in October. However, the rate of growth was also the weakest in four months and below the series average.
On the price front, input costs rose only modestly while charges remained broadly stable. Some companies’ output prices reflected higher costs, whereas others offered discounts aimed at securing new clients.
