Kenya: PMI recovers in November
December 3, 2015
The composite Purchasing Managers’ Index (PMI), which is produced by Markit and CfC Stanbic Bank, recovered from October’s 51.7, which had marked the lowest value since the survey began in January 2014, and climbed to 53.7 in November. As a result, the index rested above the 50-threshold, which points to expansion in business activity. The index has been in expansionary territory since the survey was launched.
According to Markit and CfC Stanbic Bank, November’s improvement mainly reflects that output growth sped up to a three-month high as well as a fast increase in total new orders, which expanded at as solid pace even though new exports orders were unchanged compared to October. Adding to this, employment also rose in November and backlogs of work registered a modest rise. Regarding price developments, both input costs and output charges rose at a slower rate than in October and firms stated that pressures from the depreciating shilling on prices lessened.
According to the survey report, “after a tough couple of months of growth, the private sector rebounded quite impressively in Nov 15 buoyed by a recovery mainly from output and employment. The recent broad stability in the exchange rate has also helped ease off cost pressures for most firms. The encouraging aspect of this month’s PMI report is the indication of growth being driven largely by domestic demand as suggested by the rise in new business orders despite new export orders stagnating.”