Kenya’s private sector activity fell in June, undermined by slowing business in the services, wholesale and retail sectors in an environment of high inflation and weak consumer spending power, a survey showed on Wednesday.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 47.8 in June from 49.4 a month earlier. Readings above 50 signal growth. It is the fifth month in a row that the PMI has stayed below 50, signalling a contraction in activity.
“Companies reported tough trading conditions influenced by high inflation in the country and a lack of client spending power,” Stanbic Bank Kenya said.
“Sector data revealed the services and wholesale & retail sectors as key sources of weakness.”
Inflation (KECPI=ECI) in Kenya eased to 7.9% year-on-year in June from 8.0% a month earlier, data from the statistics office showed.
Kenya’s shilling , which has hit repeated record lows since late 2021, is down 12% against the dollar so far this year.
On the positive side, the weaker shilling provided a reprieve for exporters, the survey showed.
“New export business has remained in expansionary territory for the fourth consecutive month thanks to a weaker shilling,” Mulalo Madula, an economist at Stanbic Bank, said.
Source: Reuters
