Business conditions s**ble in April, bank PMI report reveals
Kenyan firms experienced an uptick in quantities purchased and job creation during April, indicative of heightened workloads and promising prospects for new business ventures.
The latest report by the Stanbic Bank’s Purchasing Managers’ Index (PMI) revealed relatively stable operating conditions across the private sector, with order book volumes and output levels showing marginal changes compared to March.
Expectations regarding output over the next 12 months rebounded strongly from February’s record low, with overall sentiment reaching its highest point since March 2023.
Capacity enhancements
Confidence was fuelled by planned investments in marketing, capacity enhancements, establishment of new branches, recruitment drives, and expansion into other African markets, particularly pronounced among service providers. Despite this optimism, concerns loom over potential challenges in the coming months due to disruptions caused by heavy rainfall.
Christopher Legilisho, Economist at Standard Bank, noted, “Private sector activity steadied in April, following a soft print in March. Output and new orders were neutral during the month as firms reported a balanced inflow of new business despite concerns from some businesses about the heavy rainfall across the country.”
Overall, the headline PMI for April marginally surpassed the 50.0 neutral mark, indicating a slight improvement from March and reflecting a broader stabilisation in operating conditions. Notably, average input prices saw a decline for the first time in nearly four years, driven by a significant monthly drop in purchasing costs. Additionally, input prices, purchase prices, and output prices decreased in April, signalling a reduction in price pressures across most sectors surveyed, except for construction and agriculture. This trend aligns with the observation that inflationary pressures have eased.
The Kenya Bureau of Statistics (KNBS) reported a decrease in the country’s annual inflation rate from 5.7 per cent in April 2023 to 5 per cent last month. Price fluctuations largely influenced the inflation dynamics in key sectors, including transport, which saw a significant increase of 9.2 per cent, while Food and Non-Alcoholic Beverages rose by 5.6 per cent.
