NAIROBI (Reuters) – Kenya’s private sector activity grew for the fifth straight month in September, boosted by an increase in new orders for businesses, a survey showed on Thursday.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services rose to 54.1 in September from 52.9 in the previous month. Any reading above 50 indicates growth.
“Private sector activity is showing signs of momentum, although panellists continue to highlight cash flow issues that they face,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank.
“In addition to the current stock of arrears owed to the private sector, the interest-rate-capping law could also hold back firms from flourishing on a multi-month basis.”
Last week, lawmakers rejected a finance ministry request to scrap commercial lending rate caps that critics say have led to a credit growth squeeze.
The rate of new business orders was the strongest in 13 months in September, the survey found, although output among firms grew modestly due to the cash flow concerns.
Reporting by Duncan Miriri; Editing by Catherine Evans