Kenya: PMI increases in September on upbeat new orders
The Purchasing Managers’ Index (PMI)—produced by IHS Markit and Stanbic Bank—rose to 54.1 in September from 52.9 in August, thus moving further above the critical 50-threshold that separates expansion from contraction and signaling a softer pace of growth in activity.
September’s improvement was largely driven by the sharpest increase in new business in 13 months, while export orders quickened. Output rose only modestly, however, as companies continued to struggle with cash flow problems. Meanwhile, growth in the employment rate accelerated to the highest pace since December 2016, as the 12-month business outlook remained markedly high. On the price front, with input inflation slowed to a near-two-year low in September, output inflation receded.
Commenting on the print, Jibran Qureishi, Regional Economist E.A at Stanbic Bank, noted:
“Private sector activity is showing signs of momentum, although panellists continue to highlight cash flow issues that they face. In addition to the current stock of arrears owed to the private sector, the interest rate capping law could also hold back firms from flourishing on a multi-month basis.”