Kenya: PMI declines in June but remains in expansionary territory
The Purchasing Managers’ Index (PMI)—produced by IHS Markit and Stanbic Kenya Bank—dropped to 51.0 in June, from May’s four-month high of 52.5. Consequently, the index remained above the 50-threshold line, but indicated a weaker improvement in operating business conditions in the Kenyan private sector over the prior month.
June’s slowdown was largely due to output expanding only modestly in June, chiefly supported by improving demand and cash flows. Moreover, both new orders and export sales rose at slower paces in June compared to the prior month. Moreover, the continued upturn in new business led to firms increasing staff levels, although the job creation rate was marginal. On the price front, purchasing prices increased solidly in June, amid higher fuel costs. Lastly, sentiment regarding the outlook for the coming 12-month period soured in June on concerns over future Covid-19 restrictions.