The August Stanbic Bank Kenya PMI pointed to a slight improvement in the health of the private sector for the first time in seven months, as output and new orders returned to expansion territory amid greater political stability.
Job creation accelerated and purchasing activity picked up, whilst firms grew more confident about their output prospects.
That said, the improvement in business conditions was only mild and continued to be weighed down by elevated price pressures.
Indeed, input prices continued to rise at a historically strong pace, leading to the fastest increase in selling charges since June 2022.
The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI). Readings above 50.0 signal an improvement in business conditions in the previous month, while readings below 50.0 show a deterioration.
At 50.6 in August, up from 45.5 in July, the headline PMI signalled an expansion in business conditions for the first time since January.
However, the index was only slightly above the 50.0 mark, indicating that the expansion was only marginal.
After deteriorating at the sharpest rate in almost a year in July, output levels recovered slightly in August.
Surveyed companies often noted that greater political stability had helped to boost demand and lead to higher activity, especially in the services and manufacturing sectors where growth resumed.
Similarly, inflows of new work expanded over the course of August, bringing to an end a six-month sequence of decline.
However, the rate of growth was only fractional, as improvements arising from reduced political unrest and stronger demand conditions were almost completely offset by the negative impact of price increases.
