Kenya’s private sector activity stagnated at 53.2 in November after a five month acceleration to October, with investors' confidence slowing to almost a three-year low.
According to The Stanbic Bank Kenya's monthly Purchasing Managers Index (PMI) released yesterday, the output grew at the fastest pace in four months while new orders expanded at the slowest rate in six months.
Export orders, however, increased at the quickest rate in 20 months, due to greater demand from European customers.
Meantime, employment rose at a solid pace and broadly similar to the prior month albeit at the slowest rate in nine months.
Stocks of purchases also increased, although the rise was the weakest since February.
On the price front, input price inflation fell to a 27-month low, as companies reported only a modest increase in purchase prices and a slight uptick in staffing cost.
The confidence, however, weakened to a 32-month low amid reduced optimism for the future.
Jibran Qureishi, regional economist for East Africa at Stanbic said the future output sub-index still indicates that firms are cautious about activity over the coming year.
He added that in comparison to most surveys since the beginning of this year, fewer panelists complained about cash flow issues this month.
''Furthermore, as commercial banks begin to extend credit following the repeal of the interest rate capping law, the private sector will indeed be in a much better position than it currently is or has been for the past 2 and a half years,'' Qureishi said.
Readings above 50. signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
Manufacturing Pmi in Kenya averaged 52.50 from 2014 until 2019, reaching an all time high of 57.70 in December of 2014 and a record low of 34.40 in October of 2017.
