Kenya: PMI drops in February
March 3, 2016
The composite Purchasing Managers’ Index (PMI), which is produced by Markit and CfC Stanbic Bank, fell from January’s over-one-year high of 56.4 to 55.2 in February. Nevertheless, the index remained above the 50-threshold, which points to expansion in business activity. The index has been in expansionary territory since the survey was launched.
According to Markit and CfC Stanbic Bank, February’s reading reflects that both output and new orders expanded at a slower pace than in February. Conversely, new export orders growth accelerated compared to January. Employment continued to rise, even though at a slower rate, as firms intended to reduce rising backlogs of work. Regarding price developments, input prices continued to rise, although less than in recent months. By contrast, firms continued to increase output charges on strong demand.
According to the survey report, “the private sector continued to maintain firm growth momentum in February, albeit at a slower pace than the previous two months. As we pointed out last month, higher backlogs of work have consequently led to higher employment within the Kenyan private sector. Likewise, the recent stability in the exchange rate should ensure both input and output costs remain well contained for firms which will help to bolster output further.”