Kenya witnessed a surge in business confidence in 11 months to January 2023, according to the Stanbic Bank’s monthly Purchasing Managers Index (PMI).
The monthly PMI for January 2023 came at 52.0, creeping by 0.4 from December’s 51.6.
This monthly survey points towards a sustained improvement in the business environment for the fifth consecutive month.
Readings above 50.0 indicate an improvement in business conditions compared to the previous month while readings below show a slump.
The improvement is attributable to the rising demand levels, as well as improved operating conditions which boosted the business confidence.
It was anchored on a solid increase in new business volume which rose at the quickest pace within a year.
High sales growth was registered in select areas such as agriculture, manufacturing, services, and, wholesale & retail.
Construction sector the only sector to record a decline in sales for the second consecutive month.
This even as a number of businesses continued to struggle due to the elevated inflationary pressures, higher tax burdens, as well as, the persistent depreciation of Kenya shilling against the US dollar which continued to raise the cost of production.
As of February 6, 2023, the Central Bank of Kenya (CBK) data showed the shilling continued to weaken against the dollar at 124.5 units.
In January, the inflation rate came to 9 percent, from 9.1 percent the previous month of December 2022.
January 2023 inflation remained elevated compared to 5.4% recorded in January 2022 and above the CBKs target range of 2.5%-7.5%.
The elevated annual inflation was mainly due to an increase in prices of commodities under, transport index, food and non-alcoholic beverages index, and, housing, water, electricity, gas and other fuel indexes.