Kenyan firms record highest export rate in 10 months
Nairobi Coffee Auction. Exports survey included the agricultural sector. PHOTO | FILE
Exports by Kenyan firms grew at the highest rate in 10 months in February, driven by increased demand for their goods in neighbouring countries, according to a survey of purchasing managers in 400 companies.
The CfC Stanbic Purchasing Managers Index (PMI) survey for February shows that the growth in export orders allowed the firms to keep output levels high and hire additional staff in an effort to cut backlogs.
Export orders from Uganda were especially robust, according to the survey, even though the country was going through a general election which would have otherwise been expected to cause economic disruption.
“Higher exports were widely attributed to stronger demand in neighbouring African economies. Uganda was mentioned as a key source of incoming new business. With new orders rising sharply, Kenyan private sector companies reported sustained pressure on operating capacity in February,” said the lender in the survey.
“With new orders growth resulting in capacity pressures, some firms decided to hire additional staff in an effort to cut backlogs. Nearly four times as many respondents noted a rise in payrolls (15 per cent) than a fall (four per cent).”
The picture for Kenyan exports has become a bit rosier over the past one year as a weaker shilling boosted income on exchange rate gains.
Official data from the Kenya National Bureau of Statistics shows that in 2015 Kenya’s exports grew by the largest margin in four years on increased orders from Uganda, Britain and the US.
The country exported Sh580 billion worth of goods in 2015, up Sh43 billion compared to the Sh537 billion worth of exports in 2014.
This was the highest rate of growth since 2011 when exports rose by Sh102 billion—also boosted by a weak shilling.
According to CfC Stanbic, the recent stability in the exchange rate should ensure both input and output costs remain well contained for firms which will help to bolster output further.
Of concern however is the continued rise in charges and tariffs levied on the businesses—for 11 months in a row— which has forced them to keep raising the prices they charge their customers.
The businesses said that they were able to raise prices due to the healthy demand for goods and services from customers. If the demand were to tail off, they would be forced to either absorb the higher tariff costs or cut back on production.
Overall, the PMI for February stood at 55.2 points, relatively flat compared to January’s 13-month record of 56.4. It was however still higher than the average reading of 53.7 for the second half of 2015.
The PMI is based on monthly data compiled from purchasing executives in approximately 400 private companies in the agriculture, mining, manufacturing, construction, retail and services.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
