Business confidence up in Kenya ahead of festive season

The level of confidence that business executives have in the economy still remains extremely strong despite increased insecurity threats, a just-released survey by Standard Chartered Global Research shows.

The survey indicates the business sentiment indicator for the month of November surged remarkably ahead of the Christmas season, driven mainly by rising demand and a softer Kenyan shilling.The shilling fell to 90.30/40 at the start of trading yesterday from the previous day’s close of 90.20/30.

The Standard Chartered Business Sentiment Index (BSI) for Kenya rose to 62.1, recovering from October’s four-month low of 53.4.

The fall in October had followed a surge in the BSI to a new series high of 65.3 in September. Although the BSI remains below September’s levels, improved credit availability and lower credit costs are helping to lift business sentiment.

The survey polled up to 200 executives representing different sectors of the economy ranging from manufacturing, services, construction and agricultural firms to answer questions on how they feel about current and future economic conditions. Respondents were asked whether business activity has increased, decreased, or remained the same, compared with the previous month. They were also asked about their expectations over the next quarter.

Within Kenya, security issues are becoming more pressing, as witnessed by recent events on the coast and the Mandera attack in the north of the country. With anti-state actors in Kenya seizing on perceptions of economic marginalisation and actively pressuring existing fault lines, whether ethnic or religious, maintaining the high levels of confidence needed to drive a continued upturn in growth will be a challenge.