Kenya: PMI returns to expansionary territory in February
The Stanbic Bank and S&P Global Kenya Composite Purchasing Managers’ Index (PMI) rose to 51.3 in February from 49.8 in the prior month. As a result, the index moved above the 50.0 no-change threshold—for the first time in five months—signaling an improvement in private-sector operating conditions compared to the previous month.
February’s uptick was broad-based and chiefly reflected the fastest increase in output in over one year. Similarly, new order volumes rose at a 13-month high pace amid stronger demand. As a consequence, Kenyan companies were encouraged to ramp up staffing levels at a brisker pace and increase their purchases of inputs.
On the price front, lower fuel prices drove input cost inflation to a 26-month low. Accordingly, firms increased output charges at a slower rate. Lastly, business sentiment plummeted to its lowest level in the history of the survey—which began in January 2014—as firms were pessimistic regarding activity over the coming year.
Christopher Legilisho, economist at Standard Bank, provided more insight on the positive PMI reading:
“There was a notable expansion in private sector activity in February, with output increasing in agriculture, manufacturing, and services. However, construction and wholesale & retail activity slipped.”