This archive report was first published on 4 December 2019.
On December 4, 2019, the private sector in Kenya remained flat despite the government's payment of late bills and expectations for higher sales over the festive season.
The Markit Stanbic Bank Purchasing Managers' Index (PMI) remained unchanged at 53.2 in November from the previous month.
Despite greater advertising and a higher number of referrals, demand was slowest for six months, forcing firms to increase inventories for inputs at the slowest pace for nine months in November.
Companies polled said job growth remained unchanged, with the slight increase driven by new orders and the opening of offices.
Stanbic Bank Regional Economist East Africa Jibran Qureishi noted that businesses remained cautious even as they started receiving payments from the government.
"The future output sub-index still indicates that firms are cautious on activity over the coming year. The government should continue to clear pending arrears owed to the private sector in order to alleviate these constraints," Qureishi said.
The government has ordered all ministries, departments, and agencies to pay suppliers as a first charge to their budgetary allocations and withheld disbursement of cash to 15 counties until they clear their bills.
The interest rate cap repeal in November is also expected to raise credit access in the private sector and boost subpar economic growth.
