Private business confidence hits two-year high

Business confidence for the country’s private sector surged last month to a 26-month high on the back of improved operating conditions, the latest Stanbic Bank Kenya Purchasing Managers Index (PMI) shows.

The index, which tracks private-sector activity, jumped to a high of 55.70 in March from 54.7 in February on the back of the sharpest improvement in operating conditions since January 2016.

Readings from survey above 50 signal an improvement in business conditions on the previous month, while those below 50 show a deterioration.

“The health of the private sector in Kenya improved to the greatest extent since January 2016 during March,” says the survey.

“Output growth quickened to the fastest rate since the inception of the survey in January 2014. Meanwhile, the rise in new orders accelerated the fastest since December 2016, underpinned by a survey-record rise in new export orders,” it added.

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The survey says this was fuelled by improved demand, which saw job creation quicken to the fastest rate since last May.

“On the price front, input cost inflation was sharp despite softening from the preceding month,” says the survey.

According to panellists in the survey, favourable economic conditions and greater inflows of new work were the key factors behind output growth.

“In line with the trend for output, new work at Kenyan private sector firms increased for the fourth consecutive month during March. Moreover, the rate of expansion quickened to the sharpest since December 2016, partly reflecting a survey-record rise in new export orders,” said the survey.

“Panellists also attributed higher order book volumes to a higher customer turnout and improved demand.”