Kenya’s private sector activity expanded for the third consecutive month buoyed by increased demand for goods and services as the Stanbic Bank Kenya Purchasing Managers Index jumped to 52 in January.

The improvement from 51.6 in December is the highest reading in 11 months according data released by Stanbic Bank.

“Kenya's private sector activity held up well into January, with new business rising for the fifth consecutive month, spurring higher output and, consequently, employment growth. Notably, the influx of new business was the strongest in eleven months, reflecting improved marketing efforts,” said Mulalo Madula, Economist at Standard Bank.

Mulalo says the higher demand was propped up by domestic sector along with modest recovery in exports after exports plunged to a nine-month low in December last year.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

Strong output was noted the agriculture, services and manufacturing sectors as a result of new orders. 

This also saw companies record marginal rise in the workforce as they struggled to keep staff due to a lack of money amid high inflation which remained above government target easing to 9pc in January.

“However, persistently high inflation has raised concerns that price pressures will remain elevated and eight on economic activity and consumption for some time to come. Wholesalers and retailers, on the other hand, were particularly optimistic about the year ahead, as January data showed a significant increase in business expectations for the next twelve months.”

Rising cost pressured coupled with depreciation of the shilling and increased taxes remain key concerns going into the year.