This archive report was first published on 6 May 2020.
Kenya's private sector was severely impacted by the COVID-19 pandemic in April, with businesses experiencing a sharp decline in activity.
According to the Markit Stanbic Bank Kenya Purchasing Managers' Index, output fell at a record pace due to falling demand, input shortages, and lockdown restrictions.
Employment numbers dropped sharply in April, marking the biggest reduction since data collection began in January 2014.
Companies reported difficulties in obtaining inputs, mainly due to weaker supply chains and vendor constraints under curfew policies in Nairobi.
Delivery times lengthened at a record pace, while stock levels were curtailed sharply as firms struggled with the uncertainty surrounding the pandemic's duration.
As a result, business expectations for the next 12 months weakened significantly, with sentiment falling to the second-lowest in over three years.
Despite falling output and employment, backlogs eased for the second month running as new work inflows decreased.
However, weaker input demand led to a softer uptick in raw material prices, partly offset by shortages of essential goods like foodstuffs and medicine.
Despite lower expectations, Kenyan firms remained optimistic about the economy's growth prospects over the coming year.
Panelists widely cited plans to open new branches and increase spending on products, services, and marketing once lockdown measures were lifted.
Going forward, Regional Economist Jibran Qureishi noted that the longer the pandemic's impact, the more acute its effect on economic output will be, with estimates on future economic growth likely to be highly dynamic.
