Kenya: PMI jumps into expansionary territory in August
The S&P Global Stanbic Bank Kenya Composite Purchasing Managers’ Index (PMI) improved to 50.6 in August from 43.1 in July. As a result, the index moved above the 50.0 no-change threshold, and signaled an improvement in private-sector operating conditions compared to the previous month.
In August, political protests relating to the cost-of-living crisis came to an end as the government withdrew a proposed tax hike. As a result, businesses were able to resume operations and trading, driving a renewed increase in business activity; in particular, the services, domestic trade and construction sectors noted increased output. Moreover, new orders rebounded, although still-weak purchasing power meant the uptick was only slight. Less positively, firms shed staff for the first time in 2024.
Turning to prices, input costs rose at the sharpest rate since February amid increased import fees and tax burdens. As a result, selling prices also grew, though firms noted some discounting campaigns capping the overall increase. Lastly, business confidence dropped to a year-to-date low, with only 5% of companies expecting growth over the next 12 months.