An aerial view of Nairobi, Kenya’s capital city. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP More Kenyan companies are confident of reviving expansion plans after the third wave of coronavirus infections eased amid gradual uptake of vaccinations, raising hopes of progressive recovery in jobs.
Findings of a closely-watched private sector survey conducted in May show that corporate managers are upbeat about growth in the next one year, citing rising demand for goods and services as more economies reopened globally.
Nearly a third of about 400 businesses surveyed in the monthly Stanbic Bank Kenya’s Purchasing Managers Index (PMI), conducted by UK researcher IHS Markit, said they plan to resume investment in business growth over the next one year.
This comes at a time businesses and households have been stockpiling cash in banks, cautiously waiting for an ideal time for fresh investment in an economic setting that has been clouded by raised uncertainty as a result of the pandemic.
Latest industry statistics, for instance, show deposits grew Sh445 billion, or 12.07 percent, in the year through March 2021 to Sh4.13 trillion, one of the highest annual rises in nearly a decade and an indication of the projected huge spending.
Last month’s optimism among corporate chiefs was the highest in the PMI in three months, going back to levels registered before the deadly third wave of Covid-19 infections — prompting the government to restrict travel in and out of Nairobi and four surrounding counties of Kajiado, Machakos, Kiambu, and Nakuru.
A separate Market Perception Survey, conducted by the Central Bank of Kenya (CBK) every two months ahead of the monetary policy committee meeting which signals the direction of interest rates, showed nearly half of chief executives were upbeat of business growth prospects in the next 12 months.
The PMI optimism levels at 48 percent were barely unchanged from 49 percent in March.
Business leaders cited increased protection against the contagious virus on the progressive vaccination —initially targeting front-liners such as healthcare, security, and teaching personnel — and re-opening of economies across the globe that will likely lift exports, for their rising confidence in growth prospects.
“Firms appear to be increasingly optimistic about the next 12 months as new Covid-19 case numbers continue to fall and vaccinations continue to rise. The future outlook for firms improved for the first time in four months,” Kuria Kamau, a fixed income and currency strategist at Stanbic Bank, wrote in the PMI report for May.