Businesses hit 30-month low due to coronavirus

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The private sector business drop to the lowest level since November 2017 as the pandemic disrupt operations.

Business performance in the manufacturing and service sector, according to the Stanbic Bank Kenya Purchasing Managers’ Index (PMI), business was at 49.0 in February and dropped to 37.5 in March and later to 34.8 in April.

A performance of 50.0 indicates growth, but the current 34.8 reported in April is just shy of the lowest recorded in October 2017 (34.4), highlighting the effects of the pandemic on business.

The country has so far reported 607 confirmed cases of coronavirus with 29 deaths. The government has placed restrictions such as the 7 pm-5 am curfew, closure of bars and schools in an effort to control the spread of the virus.

Social distancing and restriction of businesses like restaurants and bars have largely impacted the consumer spending and flow of cash.

“Demand from Horeca (hotels, restaurants, eateries, and catering) segment has gone to completely zero because there are no parties, no events. However, there’s demand from the home segment with people buying from supermarkets, shops, and the Dukas (kiosks), but this is limited to essentials,” said Mr Shah, Bidco Africa Chairman.

“Meanwhile, companies reported difficulties in obtaining inputs (raw materials) during April, mostly due to weaker supply of items and constraints on vendors amid curfew policies in Nairobi,” stated a report by Stanbic Bank.

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The Author of this Article is a registered Financial & Investment Analyst with Institute of Certified Investment and Financial Analyst. If your require more information Email: info@finsolutions.co.ke or +254 780216631

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