Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-03-06 03:53:46
The private sector in Kenya experienced a significant uptick in activity and new orders in February 2024, marking a positive trend after six months of decline. This information was reported by the Stanbic Group Purchasing Manager’s Index (PMI) for the month, which revealed a strong rebound with a score of 51.3, up from 49.8 in January. This increase signifies expansion and is the first time the index has crossed the 50-point threshold since August 2023.
Various factors contributed to this growth, including a decrease in fuel costs and a decline in inflation rates within the country. Christopher Legilisho, an Economist at Standard Bank, noted that there was a notable expansion in private sector activity in February, with output increasing across agriculture, manufacturing, and services.
Despite the positive trends, fuel costs still played a significant role in lowering cost burdens for Kenyans, although expenses also rose due to currency fluctuations and increased VAT payments. The PMI highlighted that input costs for businesses rose at a historically low rate in February compared to previous years. Moreover, inflation rates decreased, with the Central Bank of Kenya reporting a rate of 6.3 per cent for the month, down from 6.9 per cent in January.
The strengthening of the Kenyan Shilling in February was also a key factor in the private sector’s growth. Employment levels across various industries increased during the month, with growth surpassing that of January. However, sectors such as construction, wholesale, and retail continued to face challenges due to restricted cash flow and reduced consumer spending, leading to a sharp decline in sales.
While the private sector enjoyed growth in February, concerns have been raised regarding the sustainability of this trend. Confidence in future activity fell to a survey low, indicating uncertainty about whether the growth will be sustained in the coming months. Despite the positive indicators, some remain cautious about the economic outlook.
In conclusion, the latest PMI report for Kenya’s private sector in February 2024 shows encouraging signs of recovery and expansion. The positive performance in various sectors, coupled with the decline in inflation rates and input costs, suggests a potential for continued growth. However, challenges persist, particularly in industries like construction and retail, highlighting the need for ongoing support and policy measures to sustain the momentum in the private sector.
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