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Kenya's business environment improved in February, shows index

By Jackson Okoth | March 12th 2015

NAIROBI: Business conditions in Kenya improved significantly last month with majority of private companies increasing their output, putting out new orders and employing more personnel.

This is according a monthly Purchasing Managers Index (PMI), a tool that was Wednesday launched by Markit- a leading financial information services provider in conjunction with South African-based CfC Stanbic.

Kenya now joins the global PMI series and is the third country to use this measurement after Ghana and Nigeria. Research is ongoing to rope in Mozambique and Zambia into the PMI circuit.

Kenya’s PMI for the month of February was 54.4, up from 53.6 recorded in January this year, mirroring the overall improvement in business conditions.

“Companies continued to hire staff in response to increased production requirements in February. The rate of job creation accelerated in line with output and new orders, having eased to the weakest in the survey’s history at the start of 2015, “ read in part the report.

The finding of the report also indicates that sharper expansions in output and new work intakes also led to ongoing growth of purchasing activity during the month of February.

“Input buying rose at a faster pace, contrasting with the weakest increase in pre-production inventories since the survey began in January 2014.”

Jibran Qureishi, Economist at CfC Stanbic reckons that the PMI recovered in February this year after a slower pace of growth recorded in January, primarily driven by rises in output and new orders.

He added that a fall in global crude oil prices and lower tariffs as a result of loading cheaper geothermal power into the national grid, should lower production costs and lead to higher outputs in the coming months.


The PMI survey covers agriculture, mining, manufacturing, construction, wholesale and retail, transport, information and communication, consumer services, finance and insurance, real estate and business services.

“The PMI is watched closely by economists, investment banks and financial institutions around the world. It provides the latest economic indicators that is more accurate and timely, the data guiding economic and corporate planning as well as investment strategies,” said Richard Willis, Director Markit Group Limited.

The PMI survey Africa series questionnaire covers 12 variables. They are output, new orders, employment, suppliers’ delivery times, stocks of purchases, new export orders, backlogs of work, quantity of purchases, average input prices, average input prices for purchases, wages and salaries as well as average price charges.

The Index is is expected to provide most accurate and comprehensive suite of economic indicators to the country’s economic managers, besides help provide policy makers and businesses make informed decisions. Equally, the key indicators will provide a solid basis for investment strategies and asset allocation.

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