Close

BUSINESS PERFORMANCE

Private sector registers weakest growth since 2017

In Summary

• Activities in the sector fell to a 16-month low from 51.2 in February to 51.0 in March.

• According to Jibran, the long-awaited rains are expected to reinforce the private sector growth with more output from the Agriculture sector.

Stanbic Bank’s regional economist Jibran Qureishi./FILE
Stanbic Bank’s regional economist Jibran Qureishi./FILE

Employment growth among businesses in the private sector dropped to a 10-month low last month on softer workloads, the latest purchasing manager’s index shows.

In the last month, of all respondents, only seven per cent reported rising workforce numbers, mostly due to higher new orders.

Firms that increased their workforce numbers cited higher sales, while those that reduced employment mentioned lower workloads.

This even as activities in the sector fell to a 16-month low from 51.2 in February to 51.0 in March.

Any reading above 50 indicates growth while those below shows a deterioration.

“Delayed payments, the decline in the agriculture sector performance and lack of access to credit are holding back the private sector from growth,” Stanbic Bank regional economist for East Africa Jibran Qureishi said.

Despite the increased demand, the businesses were forced to lower their prices to attract new customers.

However, some companies raised prices in line with higher input costs. While new orders dipped further to 52.0, foreign sales rose sharply on increased new and international clients although the rate of growth dropped to a four-month low.

Around 35 per cent of firms reported higher new orders, whereas 28 per cent saw a decline.

Despite this, future expectations climbed to a four-and-a-half-year high as stock levels rose substantially and at a faster pace than in February.

According to Jibran, the long-awaited rains are expected to reinforce the private sector growth with more output from the Agriculture sector.