Kenya private sector activity up slightly in December

Kenya’s private sector activity was up slightly in December, due to higher sales for firms although output rose as heavy rains disrupted goods deliveries during the month, a survey showed on Monday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services rose to 53.3 in December from 53.2 in November. Readings above 50 indicate growth.

“The … survey signalled a solid improvement in the Kenyan private sector economy, despite some headwinds at the end of the year,” the survey report said.

“Sales growth remained sharp, but output increased only slightly as heavy rains delayed activity and input deliveries.”

Kenya’s economy grew 5.1% year-on-year in the third quarter of 2019, compared with 6.4% in the same period in 2018, the statistics office said in December.

The Kenya National Bureau of Statistics said agriculture, forestry and fishing, manufacturing, construction, electricity and water sectors all recorded slower growth during the period.

The Markit survey said businesses were concerned about cashflow problems, especially from delayed government payments.

“Private sector arrears should be the main priority for the government in order to alleviate severe cash flow shortages which firms are grappling with,” Jibran Qureishi, regional economist for East Africa at Stanbic, said.