Kenyan firms are upbeat on elections

 

Business sentiment has improved slightly as Kenya gears for next Tuesday’s General Election, although the outlook remains largely gloomy.

According to Stanbic Bank’s Purchasing Managers Index (PMI), the seasonally adjusted index rose from a survey record low of 47.3 to 48.1 in July.

“The overall contraction of the private sector was driven by declining output, albeit a slower fall than in June. New orders and employment rose, but only marginally,” said Stanbic Bank in the report.

The PMI has now registered below the neutral 50.0 threshold for the third consecutive month, the longest sequence of decline recorded since the inception of the series in January 2014.

Last month was indicative of a modest contraction of the private sector, but was still the second-lowest in the series to date.

Where a decrease was registered, firms widely linked this to the upcoming elections, customers facing money shortages, high inflationary pressures, and weak demand.

“Elevated political temperatures and a lack of access to credit for firms and households kept the Stanbic PMI in contractionary territory for the third consecutive month,” said Jibran Qureishi, regional economist at Stanbic Bank.