Private sector activity in Kenya fell further in February as orders for new goods dropped for the first time in more than two years, a survey showed on Wednesday, as imports from China tumbled due to the coronavirus outbreak
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services fell to 49.0 in February from 49.7 in January. Readings above 50.0 indicate growth.
“Firms faced a shortage of raw materials owing to reduced imports from China due to the coronavirus outbreak,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank.
“This has increased output prices as alternative import markets aren’t as cheap as China.”
Companies reported the first fall in new business orders since November 2017, the survey found, attributing the decline to hard-up consumers in the economy amid a wider cash crunch.
The finance ministry said in January economic growth probably slowed to 5.6per cent last year, compared with the government’s initial estimate of about 6per cent.
The ministry expects growth of 6.1per cent this year, while the central bank forecasts 6.2 per cent.