Kenya’s private sector activity recovered marginally in the month of August after disruption by the anti-Finance Bill 2024 protest.
- •However, despite an improvement in business conditions, confidence towards future activity levels sank further in August.
- •Stanbic Bank says in its latest PMI survey that the level of optimism was the lowest recorded in the series history (since 2024), with only 5 per cent of companies expecting growth over the next 12 months.
“August PMIs show the private sector recovering merely marginally. Output and new orders improved after slumping during the months preceding, as anti-tax protests have been fizzling out. However, concerns linger about consumer spending, with many firms noting overall demand as weak in a tougher economic and business environment. Consequently, firms cut employment after seven months of robust hiring; work backlogs therefore increased,” said Christopher Legilisho, Economist at Standard Bank.
“Business expectations worsened in August, implying firms are less hopeful about output over the next 12 months,” said Legilisho.
With the marginal rise in sales following a steep downturn in July, firms opted to reduce their staff numbers over the latest survey period, marking the first decline in 2024 so far. However, firms did raise their purchases of inputs, which was the first expansion in three months.
This led to a slight increase in input inventories, supported by a renewed improvement in suppliers’ delivery times. According to survey respondents, the cost pressures across the private sector intensified in August due to rises in import fees and tax burdens.