Growth momentum in Kenya accelerated even further in April, according to the Stanbic Bank Kenya PMI®, which rose to its highest level since January 2023.
Strengthening customer demand led to the fastest rise in new work in over three years, prompting a solid expansion in output and steep growth in purchasing.
Job creation also quickened as firms looked to ease pressure on workloads. Although cost inflation ticked up amid rising demand pressures, it remained modest when compared with the survey’s historical trend. The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI).
Readings above 50.0 signal an improvement in business conditions from the previous month, while readings below 50.0 show a deterioration.
The headline PMI rose for the third month running to 52.0 in April, from 51.7 in March, and was at its highest level since the beginning of 2023. All five sub-components helped to lift the headline index from its previous reading.
New orders expanded at the fastest rate since February 2022, as Kenyan companies reported a sharp upturn in demand and additional sales from marketing.
Robust gains were observed across the services, agriculture and construction sectors, contrasting with lower sales in manufacturing and wholesale & retail. As was the case in March, strong new business growth encouraged a solid expansion in overall activity during April.
Notably, just over a third of surveyed businesses (34%) registered an increase in output, with some panellists also noting a positive impact from increased customer movement and subdued cost pressures. In line with the new orders trend, purchases of inputs increased to the greatest degree since February 2022.
Firms typically raised their input buying to meet rising workloads and boost their inventories. Subsequently, stocks grew at a modest pace that was the quickest since last October.
Lead times continued to shorten, despite some reports of weather-related delays Although the uplift in employment was relatively mild during April, it was still the strongest observed in nearly one year, as firms also sought to address workloads through greater staffing.
Anecdotal reports suggest that hiring was largely focused on temporary staff. With stocks and employment growing, capacity pressures remained relatively contained, leading to only a fractional rise in backlogs of work. Meanwhile, the latest survey data signaled a modest increase in input costs in April.
The rate of inflation was the highest for three months, but mild compared to the survey’s history. Purchase costs rose, as businesses highlighted some supply shortfalls and increased taxation, although most panellists reported no change from March.
Output prices rose at their fastest pace in three months, with manufacturers the most likely to report an uplift. Finally, after reaching a record low in March, business expectations saw a slight recovery in April, although they remained among the weakest levels ever recorded. Just 5% of firms expect output to grow over the next 12 months.
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