Stanbic’s PMI For The Month Of November Falls To 51.3

During the week, Stanbic Bank released the Monthly Purchasing Managers’ Index (PMI) for November 2020, which came in at 51.3, a decline from the 59.1 recorded in October 2020.

Key to note, a reading of above 50 indicates improvements in the business environment, while a reading below 50 indicates a worsening outlook.

Notably, the rate of growth is the least marked in five months, which signals a much softer and only modest improvement in overall business conditions.

Key to the slowdown were weaker increases in business activity and sales, as the rise in local COVID-19 cases led to issues to do with money circulation and economic stress, while lockdowns in Europe curtailed growth in foreign new orders.

Subsequently, after a renewed rise during October, Kenyan companies kept job numbers stable in November, reflecting a drop in revenues and reduced pressure on capacity.

Purchases of inputs meanwhile rose at the slowest rate for three months, leading to a softer expansion in stock levels. Competition among vendors, due to difficulties with sourcing some inputs, led to a further shortening of supplier lead times taking the rate of improvement to the least marked since June.

Although the rate of inflation softened for the first time in six months, the Purchasing costs continued to rise moderately in November, with salaries decreasing slightly from that seen in October.

Despite the outlook for business activity in 12 months’ time falling to its lowest on record during November, with worries over a rise in COVID-19 cases and new curfew measures, many businesses still reported plans for expansion.

“We have a cautious outlook in the short term owing to the increase in COVID-19 infections, despite the recent improvement in some of the leading economic indicators,” said Cytonn in this week’s report.

Taken from the Cytonn Report.