Kenya: PMI rises to 10-month high in June on soaring business sentiment
Business conditions in the Kenyan private sector improved further in June after rebounding in May. The Purchasing Managers’ Index (PMI)—produced by IHS Markit and Stanbic Bank—rose to 54.3 from 51.3 in the previous month, moving above the critical 50-point threshold that separates expansion from contraction in activity.
June’s print reflected a solid rise in new business and output, while sales rose at the fastest pace in the year so far amid upbeat domestic and external demand. In turn, the rate of hiring was the quickest in two-and-a-half-years. On the price front, input costs continued to rise steeply driven largely by a tax hike and higher fuel prices. Firms responded by raising output prices in order to maintain profit levels. Meanwhile, business sentiment for future output jumped in June, with firms reporting the highest level of optimism in the survey’s history.
Reflecting on the result Jibran Qureishi, Regional Economist E.A at Stanbic Bank, noted:
“The Stanbic Bank PMI recovered to a ten month high in June, reflecting the upbeat sentiment from private sector firms mainly due to the government releasing payments owed to both contractors and suppliers as well VAT refunds”.