Private sector activity grows in March

Kenya’s private sector activity improved last month at the fastest pace since January 2016 as new orders sent output to a series record, a survey showed on Thursday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services jumped to 55.7 in March, from 54.7 in February, reflecting the sharpest improvement in just over two years.

“A survey record rise in output since data collection began back in January 2014, primarily spearheaded purchasing activity,” said Jibran Qureishi, economist for East Africa at Stanbic Bank.

Output rose for the fourth month in a row as new orders rolled in from both local and export markets, to meet growing customer demand.

March marks the fourth straight month of expansion, according to the PMI, after output contracted for seven months because of drought and political risk associated with last year’s protracted presidential election.

The Ministry of Finance expects the economy to expand by 5.8 percent this year, rebounding from an estimated 4.8 percent in 2017.

Mr Qureishi said the outlook for firms could brighten further as talk grows of removal of a cap on commercial rates in Kenya.

“Recovering economic growth in key trading partners such as Uganda as well as the growing consensus that the interest rate capping law will either be significantly modified or abolished, should bode well for Kenya’s private sector,” he said.