NAIROBI (Reuters) – Kenya’s private sector activity declined for a third straight month in November, a survey showed on Tuesday, as businesses struggled with soaring costs.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 45.8 last month, from 46.2 in October. Readings above 50.0 signal growth in business activity, while those below point to a contraction.
The performance of Kenya’s private sector started to decline in September, and the latest monthly reading is one of the weakest since the series began almost a decade ago, the survey said.
“Driving the downturn in operating conditions was another historic increase in business costs during November,” it said.
Inflationary pressures stayed near record levels after rising at a record rate in October, survey respondents said, due to currency depreciation, higher taxes and increased fuel charges.
Companies shed jobs at the fastest rate since the COVID-19 pandemic of 2020 set in, the survey found.
The Federation of Kenya Employers said last month that 70,000 jobs have been lost in the past year due to the jump in business costs.
The survey also pointed to a gloomy near-term, with only 17% of responding companies expecting growth.
“The business outlook for the next 12 months is quite weak based on the survey results from respondents,” said Christopher Legilisho, an economist at Stanbic Bank.
(Reporting by Duncan Miriri; Editing by Susan Fenton)