Kenyan Private Sector Records Biggest Expansion in Two Years

Kevin Namunwa | Oct 7, 2020

Activity in the private sector rose for a third consecutive month in September, Stanbic Purchasing Managers Index (PMI) has shown.

Kenya’s PMI has increased to 56.3 in September of 2020 from 53 in August, pointing to the biggest expansion in private sector activity since April of 2018.

This is finally happening after the state eased coronavirus induced restrictions.

Customer demand rose at the highest pace since January 2016, leading to a surge in backlogs. As a result, employment numbers were stable after declining for six months in a row. Nevertheless, future expectations fell to their lowest since the series began in 2014.

Customer demand rose at the highest pace since January 2016 with new orders seeing the third month of consecutive growth including foreign orders especially to Europe and the Middle East.

The high level of client demand saw an uptick in the backlog of work during the month as firms struggled to meet new orders. Output prices were nevertheless higher on a month over month basis as firms run up higher input and purchases costs.

However, firms’ future expectations across the next 12 months fell to their lowest ever on record since the series was set in January 2014.

Cash Circulating Outside Banks Increases

Data from the Central Bank of Kenya (CBK) has revealed that the value of cash circulating outside banks has increased by 4%.