Businesses conditions in the Kenyan private sector continued to improve, albeit at a softer pace, in July. The Purchasing Managers’ Index (PMI)—produced by IHS Markit and Stanbic Bank—edged down to 54.1 from 54.3 in June, remaining above the critical 50-point threshold that separates expansion from contraction in activity.
July’s print reflected softer growth in output and employment. That said, new orders rose at a sharper rate than in June, amid a strong increase in demand. On the price front, input costs rose steeply, while firms raised output prices accordingly. Meanwhile, the outlook for future output increased in July and posted a new record high.
Reflecting on the result Jibran Qureishi, Regional Economist E.A at Stanbic Bank, noted:
“There is clearly a positive shift in private sector sentiment that’s become evident over the past couple of months. We don’t think it’s a coincidence that the government has begun releasing some withheld payments during this period that is subsequently boosting business confidence and further emboldening firms to increase their purchasing activities. That being said, it will be paramount for the clearance of private sector arrears to be consistent in order to continue anchoring the private sector”
FocusEconomics Consensus Forecast panelists expect fixed investment to grow 6.5% in 2019, which is unchanged from last month, and 6.3% in 2020.
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