Kenya's business conditions showed a modest improvement in August as the impact of protests faded, enabling firms to broadly resume normal operations. The Purchasing Managers' Index (PMI) increased from 43.1 in July to 50.6 in August, crossing the 50.0 mark for the first time since May and signalling a slight recovery in the private sector. Activity levels rose for the first time since May, with output and new orders improving marginally. Firms increased their input purchases, although employment fell for the first time in 2024. Input costs surged due to higher import prices and taxes, marking the steepest rise since February, while overall inflationary pressures remained subdued. The survey highlighted growth in services, wholesale and retail, and construction sectors, with declines in manufacturing and agriculture. Despite an increase in input purchases and inventories, future business confidence declined to its lowest level since the survey's inception in 2024. "August PMIs show the private sector recovering merely marginally. Output and new orders improved after slumping during the months preceding, as anti-tax protests have been fizzling out. However, concerns linger about consumer spending, with many firms noting overall demand as weak in a tougher economic and business environment. Consequently, firms cut employment after seven months of robust hiring; work backlogs therefore increased." said Christopher Legilisho, economist at Standard Bank. Attribution: Stanbic Bank Kenya PMI® Subediting: Y.Yasser
