Private sector activity expands at a slower pace in July

Private sector activity expanded at a slower pace in July as growth in output and new orders lost steam, a survey showed on Friday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index for manufacturing and services fell to 53.6 in July from 55.0 in June. A reading above 50 marks growth.

“Kenya’s private sector activity continued to expand although the pace of acceleration was moderating, but there is no cause for alarm,” said Jibran Qureishi, economist for East Africa at Stanbic Bank.

“The health of the private sector remains sound and the decline in the PMI in July is still above the historical average since data collection began.”

The survey showed firms took on staff at a slower pace during the period while facing the fastest rise in costs of materials since March this year.

Kenyan economic activity has picked up after political unrest and drought cut growth last year to its lowest level in more than five years, and the economy is forecast to expand by 5.8 percent this year from 4.9 percent in 2017.