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Private sector activity growth in August slows, firms cut staff

By Reuters | September 3rd 2020 at 14:05:43 GMT +0300

Growth in Kenya’s private sector activity slowed in August, hurt by firms laying off staff to help cut their costs, a survey showed on Thursday.

The Markit Stanbic Bank Kenya Purchasing Managers Index (PMI) fell to 53.0 from 54.2 in July, but held above the 50.0 mark that separates growth from contraction. July’s level was the highest since June last year.

“The employment sub-component index still remains below the 50 level, largely reflecting firms scaling back on wage costs,” Jibran Qureishi, head of Africa Research at Stanbic Bank, said.

“Weaker jobs growth indicates the underlying challenges the road ahead presents, even as business confidence has improved over the past two months.”

The survey suggested business activity was helped by the easing of movement restrictions countrywide that had been in place to curb the spread of COVID-19

The government removed movement restrictions into and out of Nairobi, Mombasa and Mandera counties in July, allowed local commercial air passenger travel and resumed commercial international travel in August.

“Kenya firms reported a sharp upturn in new orders during August, as the easing of coronavirus disease 2019 related restrictions led to rising customer demand,” the survey report said.

Markit Stanbic Bank
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