Last month, firms in the private sector experienced growth across different segments. A report by Stanbic Bank shows that the Purchasing Managers Index jumped from 49.3 in April to 51.3 in May. The index measures the economic health of the manufacturing sector. May’s PMI reading indicates the fastest improvement in the business environment since the start of the year.
Areas that recorded a jump include; new orders, inventory levels, output levels, employment opportunities, purchase prices, and output prices.
As per the report by Stanbic Bank, most businesses reported solid growth in the number of new orders in May. Some entities acquired new clients from abroad. Nonetheless, the level of exports grew at the softest rate in 16 months.
Due to the jump in new orders, the level of output in most Kenyan businesses increased in the period under review. Some companies experienced cash flow problems which weakened their level of output.
Purchasing activity increased in May although at a slow growth rate. Manufacturers restrained their purchases due to a sharp increase in input prices. The rate of inflation in May stood at 5.49, as new taxes such as importation fees on commodities came into effect. As a result, traders increased their sales price.
The manufacturing sector created more jobs in May compared to the previous month. Businesses attributed the rise in job opportunities to growth in demand for goods and an increase in marketing roles.
In the past month, Kenya’s private businesses expressed the highest level of optimism in nearly five years. The entities expect continued economic stability and less cash flow problems. The businesses plan to expand their network in Kenya and beyond.
