Kenya private sector activity contracts for first time in seven months, PMI shows
NAIROBI, June 5 (Reuters) - Kenya's private sector activity contracted in May for the first time in seven months, hurt by a slowing performance in the construction, wholesale and retail and services sectors, a business survey showed on Thursday.
The Stanbic Bank Kenya Purchasing Managers' Index fell to 49.6 in May from 52.0 a month earlier. Readings above 50.0 indicate growth in business activity, while those below that signal contraction.
"Total business output contracted at the fastest rate in 10 months in May, although the overall downturn was only slight," Stanbic Bank Kenya said in comments accompanying the survey.
"Declines were generally driven by the construction, wholesale and retail and services sectors, whereas output increased in agriculture and manufacturing."
Business expectations for the next 12 months were subdued in May, falling to their second-lowest level on record. Just 4% of surveyed firms expect improved performance in the period, the survey said.
"Consumers remain hesitant to spend due to concerns about their economic state and the dim outlook," Christopher Legilisho, an economist at Stanbic Bank, said.
Kenya's inflation (KECPI=ECI), opens new tab fell to 3.8% year-on-year in May from 4.1% a month earlier, data from the statistics office showed.
The economy expanded by 4.7% last year, down from 5.7% in the previous year. The finance ministry forecasts growth of 5.3% in 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
6 hours ago
- Telegraph
Labour considers copying Macron's net zero housing laws
Ed Miliband and Angela Rayner are considering copying French laws that impose strict net zero limits on housebuilders. The Cabinet duo are exploring whether to adopt Emmanuel Macron's green approach, which has driven up construction costs by around a fifth. In 2022, France introduced a law setting limits for how much carbon buildings should produce over their lifetime, including their construction. It comes as Ms Rayner, the Deputy Prime Minister, faces an uphill battle to fulfil Labour's manifesto promise to build 1.5 million new homes by 2030. Kevin Hollinrake, the shadow housing secretary, said: 'Adopting French-style regulations would seriously undermine house-building efforts in the UK. 'Already, Labour's tax policies, reduction in housing starts and failure to control our borders are pricing British families out of the market. This latest proposal would only make things worse, leaving hard-working people with less chance of owning a home. 'Above all, it highlights once again the recklessness of Labour's unrealistic net zero targets. This must not go ahead.' Mr Macron's reforms have proven controversial, being blamed for driving up construction costs, thwarting development and causing house prices to stagnate. Under the scheme, the limits are gradually ratcheted down. They were toughened at the start of this year, with the next change scheduled for 2028. But amid mounting criticism, ministers in Paris are attempting to backtrack and have ordered a review of the planned level for three years time. Valérie Létard, the French housing minister, said there was a need to find a better 'balance of standards' that 'allow for faster projects', adding: 'Urban planning and housing must serve our citizens and not be a source of administrative bottlenecks or a drop in purchasing power.' In a note issued last year, BCG, a leading consulting firm, said the regulations had sparked 'a dramatic effect on construction costs and property values'. 'In new build, the rules require companies to use more energy-efficient materials and equipment,' experts from the company wrote. 'As a result, the cost of constructing a new building has risen by an estimated 10-20 per cent, significantly slowing demand.' The firm said the new regulations had also exacerbated concerns about a value gap opening up between new homes and older, less energy-efficient ones. Despite the criticisms, officials at both Mr Miliband's and Ms Rayner's departments confirmed they were looking at introducing similar rules in the UK. The net zero department, run by Mr Miliband, quietly revealed that it was looking at the French-style reforms in a paper published last week. A Government spokesman insisted no decision has been taken on whether to go ahead. Any changes would come on top of other controversial net zero reforms that have been driven through by Labour ministers. They include the planned introduction of a 'glass tax' that is set to push up the cost of a bottle of wine by 9p and beer by 4p. Mr Miliband is also considering proposals to shift green levies from electricity bills to gas ones, pushing up the cost of central heating. The Home Builders Federation, the trade association for housebuilders, said the UK industry was already building more energy-efficient homes and cautioned against extra regulation. Rhodri Williams, its technical director, said: 'As we look to increase housebuilding to address our chronic housing shortage, and address the failings in the planning system that have for too long resulted in endless delays and additional costs for construction projects generally, any moves to add further potentially significant restrictions on construction need to be carefully considered. 'Adding yet more costs into housebuilding, on top of the other recent major increases for, amongst other things, solar panels, biodiversity net gain, the building safety levy, and employee costs would make even more sites unviable to develop and potentially slash housebuilding across the country.' Ms Rayner, who has fronted the pledge, is under growing pressure amid a widespread expectation that she will not be able to deliver the target of 1.5 million new homes across the course of this Parliament. Despite sweeping changes to planning rules, housebuilding slowed down by 14 per cent last year, according to the British Property Federation. Asked about the prospect of the new net zero limits, a spokesman for the Ministry of Housing said: 'No decisions have been made on this. We are currently considering the right approach to embodied carbon in new buildings, and will ensure that our plans do not block development. 'We are taking decisive action to speed up the planning process and deliver our stretching target of 1.5 million homes through our Plan for Change, with work already being driven through our seismic planning reforms and landmark Planning and Infrastructure Bill.'
Times
7 hours ago
- Times
A rise in defence spending will kick-start the industrial future
The decision at the Nato summit this week to increase defence spending to 5 per cent of GDP by 2035 is a seismic shift for all of us and will have massive implications for the budgets of every government department over the next decade. When we consider in the high levels of debt and tax, this raises fundamental questions for government in allocating resources at a time when the growth of tax receipts is constrained by the paucity of economic growth. Right across western Europe the challenge caused by the financial crisis of 2008 led to a step change in the long-term trajectory of financial growth. Put simply we have come up short. The challenge for us is how we strengthen the economy in the midst of the challenges we face? A failure to move the needle on this will result in living standards continuing to be squeezed and the impossibility of funding the growth of defence spending, resulting in painful cuts elsewhere. • Ageing and sick population will lead to £16bn annual tax rise Events have conspired to leverage massive costs on to the public purse: Covid, the cost of living crisis, largely as a knock-on effect of the Ukrainian conflict, have led to levels of fiscal debt typically only seen at times of war. Time of war is an apt phrase as politicians and wider society have a growing realisation that times have changed. Global instability and the threat of war is very real. Though in these islands we have excellence in many aspects of our armed forces, to a large extent our military capability has been hollowed out. The need to enhance defence capability and at pace is stark. There is now a race to invest and if we take last year's defence spending of £53.9 billion as our base, we are going to have to find by 2035 an extra £60 billion plus a year to invest in defence. Where is this to come from? Starmer's government are for now, silent on the source of the majority of this funding. Difficult choices are going to have to be made. • SNP ban on 'munitions' funds puts Scottish shipbuilding on the line Short of a sustained increase in economic growth there is going to be a squeeze elsewhere on spending. Austerity will be a price to be paid as a consequence of having to invest in our national security. Investment in defence, though, can be a lever and transformative in itself in generating economic growth. With the increase in defence spending requiring £60 billion-plus, it is beyond doubt that we need to make sure that Scotland gets its fair share, and I know the Scottish government will be standing up for Scotland's interest in making it happen. There is a long history of the SNP doing just that. From Nicola Sturgeon making the case for shipbuilding jobs at Govan and numerous MPs making the case for defence spending in Scotland, most notably Angus Robertson and Stewart MacDonald, who championed the industry and in particular defended Scotland's historic regiments — a campaign led by Annabelle Ewing. It is therefore of no surprise — and consistent with the long-term position of the SNP — to read John Swinney being quoted in The Times this week that he had no objections if a company came to Scotland to set up a munitions factory, while making the point that the Russian threat is very real. We speak of our support for Ukraine. We speak of their right to defend their sovereignty. There is a need to replenish munitions in support of the defence of Ukraine. In doing this, though, there are red lines and that means munitions supplied in the needs of strategic defence interests and never in situations such as Gaza where civilians are targeted. Indeed, the SNP website makes the point that 'defence manufacturing infrastructure in Scotland is fundamental to our national engineering and manufacturing sector'. Today in Scotland we have excellence in aerospace, defence, security and space. The challenge is leveraging in investment and accelerating economic growth that is critical to our financial security as a consequence of the need to invest in our national security. ADS, the umbrella body for the industry, points out that the sector today employs 33,500 workers and delivers a value added of £3.2 billion, with an output per worker of £95,000. These figures make it self-evident that there is an economic prize in attracting defence investment into Scotland. We all want high growth, high wage, high productivity Scotland. A society that drives investment in skills and innovation. Think for a minute of our industrial past and leading-edge electrical engineering businesses such as Ferranti, (now Leonardo). Scotland is at the forefront of innovation in both defence and in civil applications. We need to re-engineer to capture that pioneering spirit, not just for defence capabilities but to use that opportunity as a lever through defence diversification to create a broader and deeper industrial and advanced manufacturing base. John Swinney is right to demonstrate that Scotland is open for investment. An increase in defence spending is coming. We should seize the opportunities out of this to kick-start investment in advanced manufacturing through, among other things, utilising our world-class academic base to develop the technologies and businesses for the future. Investment in defence, will kick-start the delivery of an industrial future for Scotland. Ian Blackford was the SNP leader in the House of Commons from 2017 to 2022, and an MP for Ross, Skye and Lochaber from 2015 to 2024.
The Guardian
7 hours ago
- The Guardian
Could the M6 be Sydney's unbuildable motorway due to sinkholes and a reverse fault?
A 245-metre section of a new Sydney motorway tunnel plagued by sinkholes and a 'challenging' geological feature will bring a $3.1bn transport project to a grinding halt unless an eleventh-hour deal is reached. The M6's new twin 4km tunnels, connecting Sydney's south to the wider motorway network, were approved in 2019 and scheduled to open in 2025. That date was pushed back to 2028 after two large sinkholes opened above the tunnel and below an industrial estate in Rockdale in March 2024. But even that extended timeline is now in doubt after the consortium charged with the tunnels' construction between Kogarah and Arncliffe has said it will down tools from 30 June after the discovery of a 'high-angle reverse fault' in the bedrock close to the sinkholes. In an email to staff published by the Sydney Morning Herald in May, David Jackson, the director of the first stage of the M6 project – a joint venture of CPB, Ghella and UGL, known collectively as CGU – said CGU was pulling out. Jackson stated the design and construct contract had become 'frustrated' and was 'terminated by operation of the law'. He wrote that the tunnel 'excavation … has been on hold for almost a year now due to the impact of unique adverse ground conditions caused by a complex faulting zone, including a high-angle reverse fault (never seen before in the Sydney basin)'. 'The presence of such ground conditions could not have been anticipated by anyone,' he said, adding that they were only discovered once tunnel excavation was carried out. 'It is now apparent that a compliant design solution cannot be achieved to overcome these challenging ground conditions.' The government was made aware of CGU's intention to walk away before the email was sent to staff, a Transport for NSW (TfNSW) spokesperson told Guardian Australia. The project is otherwise 90% completed. Above-ground work by CGU in Kogarah may continue and could be completed by the end of the year. The New South Wales premier, Chris Minns, has criticised the unilateral move, claiming that the contractor remains responsible for designing and building the tunnels. 'My best advice to the contractor today is to send the lawyers home and bring back the engineers,' he told reporters in May. 'I'm not going to allow NSW taxpayers to be put over a barrel for these big projects.' Sign up for Guardian Australia's breaking news email A TfNSW spokesperson says the department remains 'optimistic' about reaching an agreement with CGU. They previously said the government was working with the contractor 'to identify a technical solution to the issues encountered' on the project and claimed the consortium had not demonstrated it had exhausted all technical options to move forward with the works. 'It is unfortunate CGU now appears to have determined it is in their commercial interest to down tools instead. We're considering Transport's position in relation to the contract given the unilateral steps taken by CGU,' TfNSW said. As part of the tender process for the major project, potential contractors were given geotechnical reports of the ground where the works would be carried out, TfNSW says. It was unable to provide geotechnical reports from any stage of the project to Guardian Australia. CPB, as lead contractor for CGU, says it cannot comment further. Grahame Campbell, an engineer who project managed the M4 – which was finished in half the forecast time and budget – has written a paper for the Centre for Independent Studies about 'bungles' that lead to cost and time blowouts on major infrastructure projects in Australia. He is confident the M6 will be completed eventually, but believes it will be over budget – like other major projects including Sydney's metro and light rail builds and Melbourne's North East Link. 'Of course it can be finished and it's a matter of doing it correctly and doing it with the right team,' he says. Speaking generally, Campbell says blowouts have not always been so common. They can be caused by various factors, including contractors starting construction before finishing designs, changes to designs, governments handing responsibility for risks to contractors, and a lack of expertise within government or at the contractor level. 'A contractor is pretty good at throwing concrete in the ground and putting pitching on the soil,' he says. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion 'But they're [sometimes] not particularly good at project management. Keep your mind open and understand the broadest issues and deal with them. Unfortunately, those concepts aren't very big in government … at the moment and they get into these messes. 'You would think that having lost billions of dollars over decades, [governments] would have learned by now – but unfortunately it doesn't seem like they have.' Setting up and decommissioning work sites is expensive but it's not unusual for contractors to change midway through builds, Campbell says. Stakeholders should learn from previous large projects, he argues. 'Thousands of projects have been built in the Sydney basin. You know, you could go back and see how they were managed.' Soil or geological abnormalities should ideally be discovered before works begin. Water management – which can lead to sinkholes – is 'always the biggest problem' in major projects, Campbell says. Prof Behzad Fatahi, a professor of civil engineering at the University of Technology Sydney, says the city is home to fault zones, most of which are classified as 'normal'. 'Reverse faults', where a layer of rock is forced upwards and over another layer, are less common and hard to detect because the fault angle is often very steep. Boreholes drilled into the ground five to 10 metres apart may miss a reverse fault, the professor says. Fatahi says survey techniques, including seismic surveys, are not 'bulletproof … There is always a chance of missing things.' The danger of building a tunnel at the site of a rock fault stems from potential movement at the fault zone. While Sydney is not a highly seismic area, even a tiny amount of rock movement could compromise a tunnel, he says. A novel way to protect underground pipelines from land movements involves cushioning pipes with foam, his research has shown. Solutions to prevent sinkholes include grouting, tunnel lining and freezing the ground before excavating. All civil geotech designs come with some unknowns, he says. 'There is no zero-risk … but this doesn't mean that there will be big surprises'. The two sinkholes that opened up above the M6 tunnel were not a normal risk associated with digging, Dr Francois Guillard says. The senior lecturer in the school of civil engineering at the University of Sydney says sinkholes can happen anywhere water penetrates the ground, although karstic regions – often made of soluble limestone – are typically more prone to sinkholes. Sydney is not especially prone to the phenomenon, given its mainly sandstone geology, Guillard says. For a sinkhole to develop, material under the ground's surface needs to be removed, usually by water erosion or chemical decomposition. In urban areas, disturbance of usual water drainage patterns can lead to sinkhole formation under the surface of tarmac. He agrees that investigations of soil and geology from the surface are 'not perfect'. Guillard says human-made sinkholes, triggered by engineering or building works, are 'rare' – as are urban sinkholes generally. 'I would not recommend people be worried, it's low risk,' he says.
