Kenya: PMI drops in March; conditions improve marginally
The Purchasing Managers’ Index (PMI)—produced by Stanbic Bank and S&P Global—fell to 50.5 in March, down from February’s 52.9. Despite the fall, the index remained above the 50-threshold, pointing to a continued, albeit softer, improvement in business conditions from the previous month.
March’s slowdown was due to surging price pressures, which dragged on client demand and led to softer growth of new business in turn. The war in Ukraine has exacerbated concerns over supply, pushing up commodity prices, especially for fuel, fertilizer and food products. Additionally, higher government taxes contributed to input price increases. Elevated inflation restrained output, which declined once again in March. Lastly, firms’ sentiment levels dropped to their lowest values in the series’ history. Still, businesses modestly increased their employment levels.