Kenya: PMI improves slightly in June
July 3, 2015
The composite Purchasing Managers’ Index (PMI), which is produced by Markit and CfC Stanbik Bank, improved marginally from May’s 55.1 to 55.3 in June. As a result, the index moved a bit further above the 50-threshold, which points to expansion in business activity.
According to Markit, June’s small increase reflects an acceleration in output and strong growth of new orders. The pace of job creation moderated in June, but still remained solid. As stated in the survey report, input costs and output charges continued to rise, mainly reflecting the impact of the weakening of the Kenyan shilling against the U.S. dollar. Jibran Qureishi, Economist at CfC Stanbic Bank commented that, “The latest PMI reading [...] supports our view of a rebound in economic activity in the second quarter of the year. With exceptionally good rains and a recovery in global tea prices, the agriculture sector was probably a dominant driver of this improving growth. Moreover, the expansionary fiscal policy for FY2015/16 is likely to further underpin growth in the Kenyan private sector. An important trend of the recent PMI data remains the elevated cost pressures emanating from the weaker currency.”