Kenya business activity improved in October to the greatest extent since the outbreak of the COVID-19 pandemic, new data released on Wednesday indicates.
According to the Stanbic Bank Kenya Purchasing Managers Index (PMI) survey, after falling to a series low during September, the outlook for business activity improved slightly in October.
“Output and new order growth accelerated to the sharpest on record as lockdown restrictions, associated with the coronavirus disease 2019 (COVID-19), eased during October,” says the report.
The headline PMI index rose from 56.3 in September to 59.1 in October, signaling the sharpest improvement in business conditions.
“Business confidence has been on the rise over the last couple of months, courtesy of easing domestic containment measures which has boosted demand, albeit from a low base from April/May,” Jibran Qureishi, Head of Africa Research at Stanbic Bank said.
“That being said with lockdowns being reimposed in some major international trading partners, new orders could ease over the coming months especially if external demand falters. Moreover, with COVID-19 cases also on the rise nationally, the risk of further containment measures pose downside risks to economic activity, prompting us to be cautious.” Qureishi added.
The findings show that in line with the trend seen for output, new orders rose for the fourth successive month during October, with the rate of growth accelerating to a series high.
The analysis notes that firms raised their input buying during October, with the rate of expansion the sharpest in the series so far and subsequently, pre-production inventories rose markedly.