Business confidence slipped for the first time in sixteen months due to harsh economic conditions in the country.
The monthly Stanbic Bank manager’s index saw April readings drop to 49.3 from 51 points in March.
The drop in business sentiments was attributed to poor weather conditions, cash flow issues and a flat growth on new orders.
Kenya’s economic environment continues to suffer due to poor rainfall patterns that have seen the cost of basic commodities rise.
The rate of inflation which measures the cost of various goods peaked to 6.58 percent in April 2019 from 4.4 percent in the previous month.
It is the highest rate of inflation since September 2017, mainly pushed up by prices of food and transport.
This in return is affecting business confidence whose Purchasing Managers Index reading dropped to 49.3 in April 2019 from a reading of 51 in the previous month, signaling deterioration in business conditions for the first time since November 2017.
On the price front, input cost inflation rose for the first time in seven months due to higher commodity and fuel prices, while output charges fell.
The Purchasing Managers Index compiled by Stanbic Bank says both activity and employment declined for the first time in 17 months while new orders were broadly unchanged, ending a 16-month period of growth.
However, business managers remained strongly positive in April vowing to improve efficiency and expand into new markets over the coming year to counter falling orders and expand their base.