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By Isaac OGANGA
Kenya’s private sector saw a modest improvement in business conditions in October, as activity levels and employment returned to growth, an S&P Global survey shows.
Business activity across Kenya ticked higher during October, marking the second expansion in three months. Although this cancelled out September’s decline, the pace of growth in activity was only mild.
Approximately a third of surveyed businesses reported their output rising, due in large part to higher sales and client interest.
Conversely, 29% of firms reduced their activity amid reports of cash flow challenges and the effects of political uncertainty
The headline Purchasing Managers’ Index (PMI) rose to 50.4 in October from 49.7 in September, indicating a marginal upturn in the health of the private sector. A PMI reading above 50.0 signals growth, while below that level indicates contraction.
The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
“The latest Stanbic Bank Kenya PMI data reveals a cautiously optimistic outlook for the Kenyan private
sector as business activity and employment levels returned to growth in October.
The PMI rose to 50.4, slightly above the neutral mark, indicating a marginal upturn in operating conditions, after having declined in September. This improvement implies the challenges faced in previous months as now easing, albeit slowly, setting the stage for economic recovery,” said Mulalo Madula, Senior Analyst at Standard Bank.