Private sector expansion in Kenya accelerates to four-month high
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The Kenyan private sector began the second quarter of 2015 on a positive note, with business conditions improving at the fastest pace in four months, according to CfC Stanbic Bank.
The Kenyan private sector began the second quarter of 2015 on a positive note, with business conditions improving at the fastest pace in four months, according to CfC Stanbic Bank.
According to April data, the seasonally adjusted Purchasing Managers’ Index (PMI) climbed to a four-month high of 56.2 in April, up from 53.8 in March.
Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The overall expansion was driven by sharper growth of output, new orders and employment.
Meanwhile, both input prices and output charges increased during the month.
The latest reading was consistent with a robust improvement in operating conditions at Kenyan private sector companies.
It also signaled an acceleration in growth, following the weakest quarterly average recorded by the survey so far in Q1 2015 (53.9).
Jibran Qureishi, Economist at CfC Stanbic Bank, said: “The PMI hit a four-month high in April and it’s clear to us that activity is gaining solid momentum in the second quarter of the year after rather lackluster growth in the first quarter, which could perhaps be attributed to the poor weather conditions in most parts of the country that stunted agriculture growth.”
“New orders rose boosting output; however it’s important to highlight the strongest jump in new export orders since data collection started. This is hardly surprising considering that the Shilling fell to a four-year low against the Dollar, thereby restoring competitiveness to the private sector’s exports.”
Reflective of the overall improvement in business conditions, private sector output in Kenya increased again in April.
The rate of expansion picked up to the quickest since last December, helped by stronger demand conditions and marketing initiatives.
Latest data also pointed to faster growth of new business in April, mirroring the trend shown for output.
CfC Stanbic Bank Kenya Purchasing Managers’ Index is based on data compiled from monthly replies to questionnaires sent to purchasing executives in approximately 400 private sector companies, which have been carefully selected to accuratelyrepresent the true structure of the Kenyan economy, including agriculture, mining, manufacturing, services, construction and retail.
CfC Stanbic Bank is part of the Standard Bank Group, Africa’s largest bank by assets.