This archive report was first published on 5 June 2020.
As the world grapples with the Covid-19 pandemic, Kenya's private sector is feeling the pinch. According to a recent report, business activity in Kenya rose slightly in May, but the increase was insignificant, with readings below 50 indicating deteriorating business conditions.
The Stanbic Kenya PMI rose to 36.7 from 34.8 in April, but this is still a far cry from the 50-point mark that signals improvement. The report notes that the fall in levels of activity and demand was largely due to restrictions on travel to curb the spread of the virus, which cut demand.
Stanbic East Africa Regional Economist Jibran Qureishi attributed the decline in sales to the tough economic environment worsened by the pandemic. 'Business conditions have contracted for five consecutive months now,' he said. 'The employment sub-index fell by the sharpest level in May since data collection began.'
The report also notes that consumers spent less due to lack of cash and unwillingness to travel for fear of contracting Covid-19. Export sales also fell due to lockdowns in other countries.
Notably, the recent wave of job cuts was the quickest in the series' history, with firms attributing the sackings to lower demand and a worsening outlook. The 12-month forecast for activity dropped to the weakest since August 2016.
As the pandemic continues to wreak havoc on the economy, it remains to be seen when business conditions will improve.
