Kenya: June sees PMI fall further into contractionary territory
July 5, 2017
The composite Purchasing Managers’ Index (PMI), produced by IHS Markit and CfC Stanbic Bank, fell to a record low of 47.3 in June, down from 49.9 in May. As a result, the index slumped further below the crucial 50-point threshold, which separates expansion from contraction.
A decline in output, emanating from weakening demand, drove June’s downturn. A tumultuous political climate has led to lower client turnout, largely due to uncertainty and reduced access to credit. June saw firms reduce their purchasing activity and input stocks for the first time in the history of the survey. Despite a marginal rise in employment and subdued new business, backlogs of work increased. Meanwhile, input cost inflation eased to a seven-month low but remained solid. Firms lowered their prices in spite of the higher cost burdens as a means of remaining competitive and stimulating demand.
Author: Nihad Ahmed, Economist