Nairobi — Private sector activities in Kenya dropped slightly in the month of March, attributed to a drop in new orders and output.

The latest Stanbic Bank Kenya Purchasing Manager's Index (PMI) shows that the country's PMI for March dropped to 49.7 from 51.3 in February.

PMI below 50 indicates a downtick in business activities, while the figure above shows growth.

"Private sector activity softened in March, offsetting the expansion during February. Output, new orders and purchasing activity contracted due to fewer sales and less readily available cash flow," Christopher Legilisho, economist at Standard Bank, said.

"Firms noted that, despite lower inflation, a stronger shilling against the USD in March, and increased marketing efforts, cost-of-living pressures are still subduing consumer demand."

Legilisho, however, said that firms continue to hire and increase inventories as they foresee improved demand.

"Though off a low base, business expectations for 2024 recovered somewhat, led by wholesale and retail services firms; the index for future expectations had hit the weakest level on record in February," Legilisho stated.

"Also encouragingly, firms noted input, purchasing and output price pressures as easing due to fuel prices declining further, and a stronger shilling against the USD in March. Further, staff costs were stable for a second month in March."