This archive report was first published on 3 October 2019.
Kenya's private sector reported a significant expansion in economic activity in September 2019, reaching a 13-month high. This development signals hopes of more job prospects and improved tax revenue.
According to the latest Purchasing Managers Index (PMI) by HIS Markit and Stanbic Bank Kenya, business activity jumped to 54.1 in September from 52.9 in August. This improvement in operating conditions was driven by growth in production, new orders, stocks of purchases, and employment.
Stanbic Bank East Africa regional economist Jibran Qureishi noted that private sector activity is showing signs of momentum, although panellists continue to highlight cash flow issues that they face. He also pointed out that the interest rate capping law could hold back firms from flourishing on a multi-month basis.
Companies surveyed reported a solid increase in job numbers, with the latest data signalling the joint-quickest rise in employment since December 2016. This uptick was contributed to by an even sharper increase in new business in September.
The rebound in private sector activity will give some relief to the Kenya Revenue Authority (KRA), which has struggled to meet revenue targets due to a softer economy. Kenya's economy grew by 5.6 percent in the second quarter of this year, down from an expanding 6.4 percent in the same period a year earlier.
