Kenya: Private sector activity in July rebound
The Markit CFC Stanbic Kenya Purchasing Managers’ Index (PMI) rose to 53.3 last month after falling to 51.5 in June, the lowest reading since the data series began in January 2014. A reading above 50 denotes growth.
“The chief driver of this rebound was a sharp rise in new orders. This was largely down to robust domestic demand as export growth trended sideways, probably due to suppressed global growth,” said Jibran Qureishi, regional economist for East Africa at CFC Stanbic bank.
June’s series-low was blamed in part on protests against the country’s electoral body called by the opposition.
The East African economy has been expanding steadily, with economic growth for the first three months of 2016 reported at 5.9 percent. But economists have said this may have been driven largely by public investment rather than private enterprise.
July’s PMI reading was slightly below the series trend of 54.8 and Qureishi said recent increases in taxes could exert further cost pressure on firms.
“These pressures could be relatively muted going forward as international oil prices continue to remain benign and the exchange rate also remains broadly stable,” he said.