This archive report was first published on 5 January 2022.
Kenya's private sector activity expanded to a 14-month high in December 2021, as Covid-19 restrictions eased both in Kenya and other countries.
The Markit Stanbic Bank Kenya Purchasing Managers' Index rose for the third consecutive month to 53.7 in December 2021, up from 53.0 in November.
However, the 12-month outlook fell to a record low, with most firms expecting business conditions to remain largely the same in 2022.
According to the survey, a solid improvement in the health of the private sector economy drove the high expansion in private sector activity.
Driving the upturn was a further strong increase in new work intakes at Kenyan firms, who added to their workforces for an eighth consecutive month in December 2021.
Output levels rose sharply, with the fastest rate seen since the beginning of 2021, as companies increased the number of workers to manage higher workloads.
Although the rate of job creation eased slightly from November's two-year high, this allowed firms to lower their backlogs of work for a second consecutive month.
The pace of growth was the strongest seen since October 2020, with private sector players noting improved customer demand and better cash flow as economic conditions recovered further from Covid-19 restrictions.
Business confidence for 2022 dropped in December, with the Markit Stanbic Bank Kenya Purchasing Managers' Index showing the level of sentiment was the weakest seen since the survey began in January 2014.
While there were hopes of expanding and offering new products and services in 2022, optimism fell as COVID-19 cases rose to record levels in December 2021.
The December data also indicated a sharp increase in input costs, as raw materials became costlier due to ongoing supply issues and stronger demand.
Efforts to build inventories in the face of strong new order inflows saw purchasing activity increase at the joint-fastest pace seen in 2021.
