Kenya: September records highest employment rate as PMI drops to lowest level in 5 months

Nairobi – September recorded the highest employment rate since January, according to Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) survey, noting that the agriculture and construction sectors recorded the highest rate. higher.

Despite improving employment and purchasing levels, the survey noted that future production prospects remain relatively weak due to the uncertainty surrounding inflation and COVID-19.

Overall, the month was marked by a slowdown in business activity compared to August, with the PMI falling to its lowest level in five months at 50.4 points, from 51.1 in August.

The July PMI stood at 50.6, with the 50.0 mark separating growth from contraction in activity.

The survey attributed the drop to rising costs of living which weighed on consumer spending and new orders.

“Numerous reports have indicated that an increase in the cost of living has weakened consumer spending, resulting in a lower rate of growth in total sales – and only marginal. the decline induced by the April lockdown, “he said.

In particular, he noted that the rise in the prices of gasoline, diesel and kerosene had particularly led to an increase in the rate of inflation of input costs and production charges.

“Companies found that the price increase was added to purchase prices, which rose sharply. Faced with higher cost charges, companies have increased their selling costs to the greatest extent since February,” did he declare.

“While export demand grew at the fastest rate in 13 months, improving domestic demand was negatively affected by higher product prices. Companies increased product prices to protect their margins beneficiaries after a rise in fuel prices during the month, “said Kuria Kamau, fixed income and currency strategist.

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