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Private sector records best month since January

BUSINESS NEWS
By Dominic Omondi | February 4th 2021
A manufacturing plant in Athi River. (PHOTO:Wilberforce Okwiri)

October marked the best month for Kenya’s private sector since the outbreak of the coronavirus pandemic.

The month saw businesses continue to adapt to the effects of relaxed movement restrictions. 

The latest Purchasing Managers Index (PMI) from Stanbic Bank indicates that business output and the number of new orders for October recorded the fastest growth since the index begun in 2014.   

“Operating conditions in Kenya’s private sector improved to the greatest extent since the survey began in January 2014,” states the report that collected input from 400 purchasing managers across the private sector. 

“Output and new order growth accelerated to the sharpest on record as lockdown restrictions, associated with the coronavirus disease eased during October.” Businesses reported hiring more staff for the first time in eight months and the strongest since November 2019 according to the report.

The firms attributing higher workforce numbers to a rise in workloads and efforts to reduce backlogs. 

However, the cost of inputs and raw materials rose to the highest point since 2015 according to the majority of those surveyed, a trend that has persisted for the past four months. 

“The latest increase was sharp and quickened from that seen in September,” explained Stanbic Bank report in part. “Underlying data suggested that the rise in overall input prices was driven by higher purchasing and staffing costs, with the former recording the sharper increase.” The report comes on the back of rising cases of Covid-19 infections reported across the country, as the government walks a tight rope in balancing economic recovery and introducing tougher restrictions to curb the spread of the pandemic.  

During a virtual conference with county and national government officials yesterday, President Uhuru Kenyatta blamed lax enforcement of health protocols for a surge in infections country-wide.

“The bed occupancy for Covid-19 patients had gone down to 60 per cent which gave us the comfort to relax the restrictions in September and give our economy the chance to recover but this has since gone up to 140 per cent,” said Mr Kenyatta during his address to the nation yesterday. 

The President stopped short of calling for a nationwide lockdown even as he announced new restrictions that are meant to slow further spread of the virus.

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