Kenya: Private-sector PMI plummets in July
The S&P Global Stanbic Bank Kenya PMI fell to 43.1 in July from 47.2 in June, marking the worst reading since April 2021. As a result, the index moved further below the 50.0 no-change threshold, signaling a faster deterioration in private-sector operating conditions compared to the previous month.
Protests and political instability in Kenya relating to the cost-of-living crisis and a proposed tax increase continued to drag on private-sector operating conditions: July saw the sharpest decrease in output and new orders in over three years. The protests not only deterred customer commitments but also physically blocked access to businesses, leading to delays in completing outstanding business and receiving supplies. More positively, the manufacturing sector continued to note rising output. Moreover, job creation continued as firms sought to address backlogs of work, which the protests had exacerbated.
Regarding prices, input costs rose for the second consecutive month, albeit only mildly, leading to an increase in selling prices. Lastly, business sentiment weakened to the second-lowest print on record, despite some lingering optimism related to new branch openings.