The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI), which measures the private sector activity, rose to 59.1 in October from 56.3 level in September. This is the highest PMI index reading for Kenya since the survey began six years ago.
The PMI index shows a country’s economic trends in the manufacturing and service sectors. According to this survey, Kenyan firms increased their output and new orders at the fastest pace since the country began easing COVID-19 restrictions.
The index shows that output and new orders rose for the fourth successive month due to robust demand from local and foreign markets.
As a result, the survey said firms increased their staffing levels at the quickest pace in eleven months, ending a seven-month sequence of job cuts.
Buying of inputs by firms also rose at the sharpest pace as manufacturers moved to meet growing demand.
But with new restrictions imposed by Kenya, including shorter opening hours for bars and restaurants and more prolonged night curfews, November could show slower activity, experts say.
“With lockdowns being reimposed in some major international trading partners, new orders could ease over the coming months especially if external demand falters,” said Jibran Qureishi, Head of African Research, Stanbic Bank.
He warns further that with COVID-19 cases on the rise, the risk of further containment measures poses downside risks to economic activity, prompting more caution.
The UK, Germany, and France, major destinations for Kenya’s exports, including tea, horticulture, and flowers, have already imposed new restrictions that could last well into the new year.
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