Kenyan private sector activity expands at slower pace in May survey

Kenyan private sector activity expanded at a slightly slower pace in May than the previous month as companies’ costs remained high, a survey showed on

Monday.

The Markit CFC Stanbic Kenya Purchasing Managers’ Index (PMI) edged down to 54.0 last month from 54.8 in April, although it remained well above the 50.0 mark that denotes growth.

“The PMI has expanded much more softly than previous quarters. The recent easing of the monetary policy stance is thus a good move in order to kick start economic activity,” said Jibran Qureishi, regional economist for East Africa at CFC Stanbic Bank.

The central bank cut its benchmark lending rate by 100 basis points to 10.5 percent on May 21.

The PMI in May was below the overall series average of 55.0 but broadly in line with the trend since the start of 2015, at 54.3, Markit said.

“Costs for firms have also been on an upward trend over the past couple of months despite the stable exchange rate, as attracting labour has become more competitive, forcing firms to outbid each other,” said Qureishi.