The private sector output expanded by slowest rate during the month, latest PMI shows.
Overall, the PMI fell from 55.0 in June to 53.6 in July as firms hired “at slower and marginal pace in July as they faced the fastest rise in overall input costs since March”.
The PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
Kenyan firms lost their job creation momentum in July as subdued manufacturing output and shrinking sale orders took their toll, a new survey shows.
Labour-intensive manufacturing accounts for between nine and 11 per cent of Kenya’s annual gross domestic product (GDP).
The economic blueprint Vision 2030’s Delivery Secretariat warned that continued under-performance of manufacturing risks, undermining the country’s development path.
The latest Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) shows private sector output expanded by its eight-month slowest rate in July while orders dropped to levels last seen in January.
Overall, the PMI fell from 55.0 in June to 53.6 in July as firms hired “at slower and marginal pace in July as they faced the fastest rise in overall input costs since March”.
The PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
“The health of the private sector remains sound and the decline in the PMI in July is still above the historical average since data collection began,” said Jibran Qureishi, Stanbic Bank’s regional economist for East Africa, downplaying rising input costs as a regular July phenomenon.
“That said, other tax measures may still come through over the coming months, subject to pending court decisions. ... However, the recent decline in food prices should bode well for consumption spending over the coming months. ”
Last month, the High Court temporarily halted the implementation of the 2018/19 tax measures that would have raised the prices of different products.
This week, the Kenya Revenue Authority also suspended its plant to impose stamp duty on soft drinks pending investigations into its hiring of a Swiss firm, SICPA Securities Solutions hired to provide the service.
Kenya National Bureau of Statistics data shows increased prices of sugar, petrol, electricity and healthcare pushed the July inflation rate to a four-month high of 4.35 per cent. Inflation rose in July by 0.07 percentage points, from 4.28 per cent recorded in June.
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