Kenya’s private sector showed signs of improvement in October, according to a recent survey by S&P Global. The Purchasing Managers’ Index (PMI) increased to 50.4 from 49.7 in September, indicating a slight growth in the sector. This is good news for the economy, as a PMI reading above 50.0 suggests expansion.
Business activity saw growth for the second time in three months, driven by increased sales and client interest. Despite challenges such as cash flow constraints and political uncertainty, firms are optimistic about the future. Employment levels also rose in October, although the pace of job creation was moderate.
Many companies are still facing difficulties due to tough economic conditions and rising costs. However, the survey reported that purchasing efforts have accelerated, leading to a significant increase in inventories. This shows that firms are preparing for an uptick in demand.
While input costs have risen slightly, mainly due to higher tax payments and material costs, lower fuel prices have helped keep overall cost burdens in check. As a result, the increase in selling prices was one of the slowest in nearly four years.
Looking ahead, confidence about future activity is at a four-month high, with firms planning to expand and invest in new products and marketing. Despite this positive outlook, sentiment remains subdued compared to historical trends.
Overall, the private sector in Kenya is showing signs of recovery, with businesses demonstrating resilience in the face of challenges. As the economy continues to navigate through uncertain times, it is essential for companies to remain agile and adaptable to sustain this growth momentum.
