Kenya: PMI falls to near one-year low in April with business conditions deteriorating sharply
The Purchasing Managers’ Index (PMI)—produced by IHS Markit and Stanbic Kenya Bank—dropped to an 11-month low of 41.5 in April, from March’s 50.6. Consequently, the index fell markedly below the 50-threshold line—separating expansion from contraction in operating conditions in the Kenyan private sector—indicating a sharp deterioration from the previous month.
April’s result was largely due to renewed Covid-19 restrictions in several counties, which had a negative impact on movement and demand, leading to a sharp drop in output, while new orders also decreased notably. Consequently, employment levels fell for the first time in seven months. On the price front, input inflation rose sharply on higher fuel prices and material shortages due to global supply issues. As such, output prices rose for the fourth month running, albeit at the softest rate in this period. Lastly, firms became less confident about the coming 12-month period due to the impact of lockdown restrictions, with sentiment falling to the weakest level since the beginning of the survey in 2014.