CfC Stanbic Bank and Markit launch Kenya PMI

Today marks the first public release of data collected from the new monthly survey of business conditions in the Kenyan private sector. The survey, sponsored by CfC Stanbic Bank and produced by Markit, has been conducted since January 2014 and provides an early indication of operating conditions in Kenya. The headline figure derived from the survey is the Purchasing Managers' Index" (PMI").

Growth of Kenyan private sector accelerates in February

The seasonally adjusted PMI remained above the neutral 50.0 threshold in February, signalling a further improvement in Kenyan private sector operating conditions. Moreover, at 54.8, the latest reading was indicative of a solid expansion, rising from the survey-record low of 53.2 that was seen in January.

The main findings of the February survey were as follows:

Kenyan private sector output increased at a faster rate in February, mirroring the overall improvement in business conditions. Furthermore, the pace at which output rose was broadly in line with the series average. Anecdotal evidence linked growth to stronger order books and commercial initiatives.

Companies continued to hire staff in response to increased production requirements in February. The rate of job creation accelerated in line with output and new orders, having eased to the weakest in the survey's history at the start of 2015.

Meanwhile, total input prices increased at a moderate pace in February, reversing the trend observed in the previous month. Latest data signalled that the overall increase was driven by modest rises in both purchase prices and staff costs during the month. Subsequently, prices charged by Kenyan private sector firms rose in February, albeit at a historically muted pace.

Commenting on February's survey findings, Jibran Qureishi, Economist at CfC Stanbic Bank said:

"The PMI index recovered in February after a slower pace of growth recorded last month, primarily driven by rises in output and new orders. Interestingly, the PMI seems to have lost the solid momentum witnessed towards the end of last year, although we suspect this is transitory. The decline in international oil prices and power tariffs as a result of the geothermal component being added to the national grid should lower costs for most firms in Kenya and will probably lead to higher output in the coming months. Confidence within the Kenyan private sector remains high and should continue to bode well for business conditions."

Download full article