Many companies have reported a significant growth in new business deals in March, but new hiring remains subdued, according to the latest Stanbic Bank Kenya PMI survey.
- •The index rose to its highest level in ten months, from 50.6 in February to 51.7, as strengthening demand conditions led to a solid increase in new orders across the private sector economy.
- •Most of the sectors monitored by the PMI survey registered growth in output and sales.
- •The only laggard was manufacturing which saw fresh contractions in production and new orders.
“The March Kenya PMI shows a private sector with faster growth in output and new orders, assisted by increased customers, good weather, and sustained marketing. However, the upturn was not broad-based, with some firms and certain sectors feeling the downside of weaker consumer demand,” notes Christopher Legilisho, Economist at Standard Bank.
“Still, there were robust expansions in output and new orders across several sectors such as services, wholesale and retail. Only the manufacturing sector exhibited soft demand. Still, there was increased purchasing activity as well as increased inventories in the private sector in March,” he added.
“Pricing pressures were at their softest in five months due to restrained increases in input and purchase prices. Staff costs rose only slightly. The agricultural and construction sectors were key in driving increases in input prices, but manufacturing input costs declined, contributing to output prices rising only marginally. Kenyan businesses remain uncertain about future output expectations.”
Employment
Employment levels at Kenyan businesses rose for the second consecutive month in March. However, as was the case in February, the increase in staff numbers was mild. Approximately 98% of surveyed businesses reported no change in employment over the latest survey period.
The private sector saw slight improvement in business conditions in February, marking its fifth consecutive month of expansion. The index rose to 50.6 in February from 50.5 in January, reflecting a marginal upturn in operating conditions, as a PMI reading above 50.0 signals improvement in business conditions.
The headline PMI rose in March.
