The Purchasing Managers’ Index (PMI) for Kenya fell to 50.5 in March, down from 52.9 in February, as food, gasoline, and fertilizer prices were influenced by the ongoing Russia-Ukraine crisis.
Business activity increased in March, albeit at a slower pace, according to Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank. Inflationary pressures dampened consumer demand, while manufacturers reduced production.
Consumers cut back on their spending in March, resulting in a slower growth in sales volume for businesses. This is the second time in three months that I’ve had a contraction like this.
PMI values over 50.0 indicate that business conditions have improved, while data below 50.0 indicate that they have deteriorated.
Consumer demand fell in March as inflationary pressures increased, pushing expenses to their highest level in eight years.
The war in Ukraine, as well as government levies, pushed up purchase prices.
Concerns about the war’s influence on world supply caused commodities like petroleum, food, and fertilizer to skyrocket in price.
Due to contractions in the agricultural, construction, and wholesale and retail sectors, output fell in March.
Input purchases, on the other hand, continued to rise dramatically as businesses sought to hoard commodities on concerns that supply might deteriorate.
Vendor performance improved even more, causing inventories to climb at their quickest rate since November 2020.
Fears of fast price inflation weighed heavily on company confidence in March, which fell to its lowest level since the poll began in January 2014.
On a more positive note, enterprises saw a little increase in employee numbers in March, owing to attempts to increase capacity and close new sales.
The PMI Purchasing Managers’ Index is one of the most highly followed polls in the world, with over 40 nations participating and financial markets, business decision-makers, and central banks all keeping an eye on it.