This archive report was first published on 4 September 2021.
Published on September 4, 2021, a survey by Stanbic Bank's Purchasing Manager's Index (PMI) revealed a slight improvement in business conditions in Kenya's private sector for the fourth consecutive month.
The improved conditions were attributed to a rebound in economic conditions after the battering caused by the Covid-19 pandemic. New orders grew at a faster rate, and employment levels increased, prompting private sector players to increase orders to meet the growing demand.
However, the optimism among executives across various firms has sunk, with business confidence slipping to a near-record low. The respondents to the survey do not expect significant growth in output by local firms over the next 12 months.
The PMI noted that the rate of growth picked up as firms saw a faster expansion in new business in August compared to July. The headline PMI stood at 51.1 in August from 50.6 in July, remaining above the 50 neutral mark.
According to Kuria Kamau, the Fixed Income and Currency Strategist at Stanbic Bank, the pace of the recovery in business conditions accelerated in August, driven by higher levels of demand and employment.
He noted that an increase in domestic demand was witnessed in most key sectors, except manufacturing, while rising orders from clients in the Middle East and Europe boosted overall export demand. Firms have been unable to raise their output to meet all the additional demand, but they appear to be preparing to increase their output to meet this demand, as evidenced by the higher employment levels and quantities of purchases reported in August.
