Kenya’s private sector closed 2019 on a positive note as increased private sector activity was recorded during the month of December on the back of sharp growth in sales.
According to the latest Stanbic Bank Kenya purchasing managers index, output increased only slightly compared to November as heavy rains delayed activity and input deliveries.
Continued cash flow problems and heavy rains however curtailed output in some businesses.
Jibran Qureishi, Stanbic Bank’s regional economist in East Africa has said the government should prioritize payment of pending bills owed to businesses in order to alleviate severe cash flow shortages, which firms are grappling with.
With regard to new export orders, Kenyan firms reported that higher demand from European countries led to a sharp rise in new export orders in December.
But employment growth weakened to the slowest in seven months in December although some firms hired additional labour due to higher workloads.
Despite the unstable economic climate, the country posted a 53.3 purchasing manager’s index reading in December, pointing to a solid improvement in business conditions, one that was stronger than the 52.6 average for 2019.
A reading of 53.2 was also posted in both October and November signalling stable growth throughout the fourth quarter.