NAIROBI (Reuters) – Kenya’s private sector activity was broadly steady in April, entering slightly into expansion territory after contracting marginally a month earlier, a business survey showed on Monday.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) stood at 50.1 in April, up from 49.7 a month earlier but below February’s reading of 51.3.
Readings above 50.0 signal growth, while those below point to a contraction. February’s figure was the first above-50 reading since August.
Christopher Legilisho, an economist at Stanbic Bank, noted price pressures had eased across most sectors surveyed apart from construction and agriculture.
“This aligns with our view that inflationary pressures have abated. Nonetheless, wage pressures were still prevalent as firms continued to hire staff and increase inventories because they anticipate improved demand,” he added.
Kenya’s inflation rate fell for the third month in a row in April to 5.0% year-on-year from 5.7% in March, data from the statistics office showed.
However, there are concerns that second quarter performance could be affected by effects of heavy rainfall. As of Thursday, floods across Kenya had killed at least 210 people and destroyed roads, houses and bridges and farms.
“We share these concerns and worry that growth will slow in Q2:24 (second quarter 2024) because of the widespread devastation and disruptions caused by the heavy rain,” Legilisho said.
(Reporting by George Obulutsa; editing by Christina Fincher)
