Demos cause sharpest drop in trade deals since 2022 poll

Police officers walk past a bonfire started by a group of Azimio-led Anti-government protestors along Mlolongo Town link road, Machakos County on July 19, 2023. PHOTO | WILFRED NYANGARESI | NMG  

By CONSTANT MUNDA More by this Author

Business deals in the private sector last month contracted at the sharpest rate since the

general election, a Stanbic survey said, with firms largely blaming anti-government protests for the accelerated downturn.

The Stanbic Kenya Purchasing Managers Index (PMI) survey, based on a sample of about 400 corporate managers, indicates private sector activity was undermined by a quick drop in sales on unrelenting price increases.

Read: How markets are shrugging off opposition-led protests

Reduced consumer demand for goods and services prompted companies to significantly cut output which slowed employment opportunities, the survey suggests.

Firms in manufacturing, construction, wholesale, retail and services sectors reported a drop in orders, with agriculture posting an uptick in sales, explaining the slowest growth in hiring in four months.

The overall PMI reading — a measure for month-on-month private sectors activity such as output, new orders and employment — fell to 45.5 in July from 47.8 in the prior month.

PMI reading has since February remained below 50, which separates growth from contraction, signalling business deals have now fallen for six straight months.

The pace of slide in business conditions was the fastest since last August when Kenyans elected William Ruto as the fifth president in a closely-contested poll.

Read: Business bears brunt of protests as stock market indifferent

“Deteriorating operating conditions were driven by a sharp and accelerated fall in new business inflows, as Kenyan firms highlighted a drop in client demand due to the cost-of-living crisis,” analysts at Stanbic Bank and American analytics firm, S&P Global, wrote in the Purchasing Managers Index (PMI) report for July.

“Alongside this, several firms noted that political demonstrations had adversely affected sales.”

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