Kenya: PMI records worst reading since April 2021 in July
August 3, 2022
The Stanbic Bank Purchasing Managers’ Index (PMI) came in at 46.3 in July, down from June's 46.8. July's result marked the worst reading since April 2021. As such, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in business conditions compared to the previous month.
July’s downturn was chiefly due to uncertainty over the 9 August elections and high inflation, which led to business activity contracting at the sharpest pace in 15 months, while new business also declined. With regard to costs, higher prices for energy and food, a weaker shilling and import taxes all pushed inflationary pressures to increase at one of the strongest paces on record. Higher costs were once again translated to higher output charges. More positively, employment levels increased in July, ending a two-month sequence of job shedding. Additionally, vendor performance improved at the strongest pace since October 2021, with delivery times speeding up for the 26-month running. Lastly, business sentiment was muted in July.
Author: Marta Casanovas , Economist