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Kenya’s private sector businesses improved in December

Zachary Ochuodho @zachuodho

Kenya’s private sector businesses enjoyed improved operating conditions in December 2018, a new study by Stanbic Purchasing Index (PMI), indicates.

According to the survey at 53.6 in December, the headline PMI rose from November’s reading of 53.1 – which signalled a solid advancement in Kenya’s private sector economy.

The survey indicates that the firms raised activity levels at a marked rate, although the latest increase was the softest in three months. Moreover, firms were able to raise activity sufficiently to lead to the first fall in outstanding business since July.

Staffing levels recorded a modest rise during December. Employment growth was driven by an increase in casual workers in line with the rise in new orders. Alongside this, supply chains maintained a strong efficiency, with delivery times decreasing at a sharp rate.

The purchasing activity grew substantially during the month due to expansion in new orders. However, the rate at which purchases increased was the second-weakest seen over the course of 2018.

“Likewise, the stocks of purchases rose at a slower, but still at a marked pace. On the price front, Kenyan private sector firms reported a softer rise in overall input prices in December. In fact, the pace of increase was at a five-month low, with only around 14 per cent of panellists seeing costs increase,” the study indicates.

Where the costs did rise, firms blamed higher transportation and food costs, as well as a sharper increase in salaries. The staff costs rose as firms reported dividing out profits earned from the recent sales growth.

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