The private sector reported expanded economic activity last month, touching a new high of 27 months, signalling hopes of more job prospects and improved tax collection after a bruising election year.
The latest Stanbic Bank Kenya Purchasing Managers Index (PMI), which tracks private-sector activity shows business activity jumped to a high of 56.40 in April from 55.7 in March on the back of the sharpest improvement in operating conditions since January 2016.
Companies surveyed reported growth in production, new orders, stocks of purchases and employment, the highest trend since January 2016.
A print above 50 denotes growth in overall business activity while a reading below that mark points to a contraction.
The survey shows stable economic conditions and greater volumes of incoming new business were the key factors behind output growth, according to companies interviewed.
“The strength of the recovery in private sector activity continued last month. This shows that the underlying demand conditions in the economy are consistent with a solid recovery in economic activity,” said Jibran Qureishi, regional economist East Africa at Stanbic Bank.
Companies reported strong demand from both domestic and external markets.
Companies also said that inflows of new work was behind the latest increase in outstanding business.
In response, the companies raised their staffing levels in April.
“The rate of job creation was solid and the strongest reported since the end of 2016,” says the survey.
The rebound in private sector activity will give some relief to the Kenya Revenue Authority (KRA), which has struggled to meet revenue targets due to a softer economy, which expanded at slowest pace in five years in 2017.
Kenya’s economy grew by 4.9 per cent in 2017, recording the slowest margin in five years amid prolonged electoral process and adverse weather.
That pace of growth falls far below the 5.9 per cent recorded in 2016, data released today by the Kenya National Bureau of Statistics (KNBS) indicate.
The last time Kenya recorded growth below five per cent was in 2012, also an election year, when the economy expanded by 4.5 per cent.
“The slowdown in the performance of economy was partly attributable to uncertainty associated both a prolonged electioneering period coupled with adverse effects of weather,” said Treasury and Planning Secretary Henry Rotich earlier.