This archive report was first published on 6 August 2020.
Kenya's private sector has shown signs of recovery, with the Stanbic Bank Kenya's Purchasing Managers Index (PMI) rising to 54.2 in July, marking the first growth since December 2019.
However, despite this growth, companies continued to shed jobs in the month, albeit at a slower pace than in previous months.
According to the PMI survey, the removal of county travel restrictions supported output and business sentiment in July, enabling firms to receive inputs much quicker.
But the outlook remains uncertain, with future expansion plans still not firmed up.
As a result of the pandemic, the government has cut its GDP growth forecast for this year to about 2.5 per cent, down from an initial six per cent.
Companies have resorted to laying off workers, slashing salaries, and adopting unpaid leave policies to cut operating costs amid depressed demand.
On a positive note, the PMI findings suggest that business deals were on a downward trend in the first six months of the year, but July's growth indicates a potential turnaround.
Stanbic Bank Kenya's head of Africa Research, Jibran Qureishi, noted that the removal of county travel restrictions supported output and business sentiment in July, enabling firms to receive inputs much quicker.
He added that supplier delivery times improved at the fastest rate for 16 months.
