Kenya private sector expands in November
Private sector activity in Kenya rose in November from a record low hit in the previous month, pointing to a potential recovery as political risks ease, survey data showed on Tuesday.
The Markit Stanbic Bank Kenya Purchasing Managers' Index (PMI) for manufacturing and services rose to 42.8 last month, from 34.4 in October, but remained well below the 50 mark that separates an expansion from a contraction.
"Business conditions deteriorated at a slower pace, thanks in large part to the conjecture by the private sector that the political impasse is now behind us," said Jibran Qureishi, Economist for East Africa at Stanbic Bank.
President Uhuru Kenyatta was sworn in for a second and final five-year term last week after a protracted election. The Supreme Court nullified the initial vote on September 1 and ordered a repeat which was boycotted by the opposition.
Output has contracted for seven straight months, according to the PMI, but Qureishi said a recovery may be near. "Lower political risk could provide the platform for Kenya's private sector to stage a recovery over the near to medium-term," he said. "Good weather conditions have improved growth prospects for the agriculture sector and reduced inflation expectations."
The government expects the economy to grow by 5.1% this year having reduced its initial forecast of 5.9%. Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.