Kenya: PMI falls in January on softer growth in new orders
February 5, 2019
The Purchasing Managers’ Index (PMI), produced by IHS Markit and Stanbic Bank, fell to 53.2 in January from 53.6 in December. The index, thus, moved closer to the critical 50-point threshold that separates expansion from contraction, signaling slightly weaker growth in private sector activity in January compared to the previous month.
Softer growth in new orders was behind the drop in the index, which more than offset an acceleration in output. While export orders grew at a faster pace, thanks to higher demand in overseas markets, overall new orders rose at the weakest rate in four months on easing demand in the domestic economy. Backlogs of work fell accordingly, and the rate of job creation remained modest. On the price front, input price inflation eased on lower fuel prices, which led firms to raise output prices only moderately.
Commenting on January’s print, Jibran Qureishi, Regional Economist E.A at Stanbic Bank stated:
“Owing to cyclical factors, private sector activity may soften somewhat over the next couple of months as growth broadly in the agriculture subsector eases. However, despite these risks, lower international oil prices should help keep costs suppressed for the private sector and thus underpin purchasing activity.”