Stanbic: Why 2018 is best year for private sector
Kenya’s businesses had their best run in four years in 2018, a new index that measures the performance of the private sector has shown.
Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) saw firms make more new orders and increase staffing levels, signaling an improved business environment. PMI reading rose to 53.6 in December, a slight increase from November’s 53.1, “signaling a solid advancement in the private sector economy,” according to Stanbic.
“The latest survey confirmed a full calendar year of growth, and one where the average PMI reading was the strongest since 2014,” said Stanbic in the report. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The findings mirror analysis of the Kenya National Bureau of Statistics which showed that Gross Domestic Product (GDP) between July and September was the highest in three years.
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GDP, or the sum of all goods and services in the economy, increased by six per cent in the third quarter of 2018, compared to 4.7 per cent in the same period in 2017.
The last time the economy experienced such growth was in 2015 when GDP expanded by 6.1 per cent.
After a turbulent 2017, which was characterised by drought, low credit uptake, and political upheavals, the economy has been on an upward trajectory.
“The Stanbic PMI closed the year strongly, recording the highest average since 2014,” said Jibran Qureishi, Regional Economist East Africa at Stanbic. He said firms scrambled to clear backlogs of stock in December thus boosting output.