Kenya: PMI eases in October; conditions still improve
The Purchasing Managers Index (PMI)—produced by Stanbic Bank and S&P Global—moderated to 50.2 in October, down from Septembers seven-month high of 51.7. As a result, the index moved closer to but remained above the 50.0 no-change threshold, signaling a milder improvement in business conditions in the private sector from the previous month.
Octobers softening was chiefly due to new orders expanding at a more moderate pace than in September; the rebound effect following the resolution of uncertainty in the post-election period faded. Moreover, higher costs dampened purchasing power and weighed on client demand. Price pressures also negatively affected output, which contracted for the seventh month running. With regards to prices, a weaker currency, material shortages and higher fuel prices led purchase costs to increase at a record pace, prompting a subsequent sharp increase in output charges. Meanwhile, employment levels rose in October. Lastly, firms outlook over the coming year was the most upbeat in 15 months despite growth concerns.