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Kenya PMI May 2021

Kenya: Private sector activity rebounds strongly in May; PMI hits four-month high

The Purchasing Managers’ Index (PMI)—produced by IHS Markit and Stanbic Kenya Bank—jumped to a four-month high of 52.5 in May, improving markedly from April’s 41.5. Consequently, the index broke through the 50-threshold line, indicating a solid improvement in operating business conditions in the Kenyan private sector over the prior month.

May’s sharp upturn was chiefly due to output expanding strongly as the curfew hours and travel restrictions between counties were eased. Moreover, new orders rose at the sharpest pace in seven months, largely due to growing exports as foreign demand improved. As a result, staff levels increased in May.

On the price front, businesses’ margins were reduced as input prices rose at a quicker pace than output charges—higher fuel costs made transport more expensive and higher staff costs, all bolstered input expenses. Lastly, firms’ sentiment regarding the next 12-month period improved to a three-month high amid expansion plans.

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