NAIROBI, March 5 (Reuters) – Kenya’s private-sector activity expanded at a rapid pace last month as output rose and orders increased, a survey showed on Monday, news that will cheer investors after months of election-related contraction last year.
The Markit and CFC Stanbic Kenya Purchasing Managers’ Index (PMI) for manufacturing and services rose to 54.7, its highest since April 2016, from 52.9 in January. Anything above 50.0 denotes growth; anything below, contraction.
“We still expect strong performances, mainly from the services and agriculture sectors, to support GDP growth this year,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank.
Companies hired new workers at the strongest pace in nine months in response to the increased orders, the survey found.
February marks the third straight month of expansion, according to the PMI, after output contracted for seven months because of drought and political risk associated with last year’s protracted presidential election.
The Ministry of Finance expects the economy to expand by 5.8 percent this year, rebounding from an estimated 4.8 percent in 2017.
Qureishi said a repeal of a government cap on commercial rates could boost the flow of private-sector credit and add momentum to the projected growth.
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(Reporting by Duncan Miriri, editing by Larry King)