Kenyans Cut Spending On Higher Costs
Written by Inka FM on 5 April 2022
Kenyans have shaved spending significantly as a measure to manage rising commodity costs over the past month.
According to new data from the Stanbic Bank Kenya Purchasing Managers Index (PMI), the reduced consumer spending has subsequently cut private sector activity including sales recorded in March.
The headline PMI reading as such fell to 50.5 points during the month from a higher 52.9 points in February.
New orders during the month stood at their weakest level in nearly a year holding off a pandemic led downturn to consumer demand in January.
At the same time, Kenyan firms marked the first decline in export orders inside 11 months with the largest decline in demand coming from clients in Europe.
“The slowdown was driven by rising inflation which resulted in subdued demand growth by consumers and a contraction in output by producers,” noted Stanbic Bank Fixed Income and Currency Strategist Kuria Kamau.
Prices for both business costs and charges on created goods and services reached their highest levels in eight years since early 2014.
Input purchasing by firms however defied the rising costs to stockpile goods amidst concerns of sharper supply chain constraints going forward.
Meanwhile, the growth of new jobs remained modest in March as firms sought to boost capacity and completely new sales.
The concerns on inflation have nevertheless tilted business confidence to its lowest level ever in the index’s history.