Kenya's private sector activity declined to a 15-month low in February, according to the Stanbic Purchasing Managers Index (PMI), as consumer demand weakened and output slowed. The index dropped to 51.2 from 53.2 in January, marking the lowest level since November 2017, a period marked by electioneering activities.
Jibran Qureishi, regional economist at Stanbic Bank, attributed the decline to seasonal dry weather patterns and cash flow constraints. "The first quarter of the year is typically associated with dry conditions, which aligns with the PMI contraction. However, this trend is cyclical, and recovery is expected as long rains arrive in March and April," he said. Despite the downturn, export orders remained strong due to Valentine’s Day flower shipments to Europe, supporting the Kenyan shilling.
Survey respondents cited rising input costs, including food, raw materials, and taxation, as key challenges. Stanbic noted that firms faced liquidity issues, with some reducing output amid unfavorable weather. Citi Bank warned that sustained growth above the 5-6% average would require significant advances in agriculture and manufacturing, alongside currency stability.
