Abstract: Manufacturing firms are recognised globally as an essential element of a health economy. In Kenya the state has identified the manufacturing sector as one of its Agenda 4 development blue print for the country. In spite of this expectation sector’s performance has been wanting and is beleaguered by several obstacles. In fact, the sector’s contribution to the Kenya’s economy is worrying after the realization that other sectors of the economy such as telecommunication and real estate have surpassed its contribution to the national gross domestic product. This underperformance, together with financial challenges, low productivity and quality control problems have forced some manufacturers to close down while other are undergoing severe financial distress. Information as to how macroeconomic performance could be underpinning the financial performance of the manufacturing sectors is scanty in the literature. Guided by a descriptive research design, a census of manufacturing firms listed on Nairobi Securities Exchange was conducted and a five-year secondary data for period 2013 to 2017 collected from their published financial statements as well as KNBS database. The data analysis indicate that only 55.55 percent of variation in financial performance was explained by changes in the level of macroeconomic variables. A unit reduction in inflation rate and foreign exchange rate, and a unit increase in economic growth led to a positive variations in financial performance of the listed manufacturers in Kenya. Therefore, there was a statistically significant effect of economic growth on financial performance of listed manufacturing firms in Kenya. Efforts to improve the performance of manufacturing sector must be accompanied by monetary and fiscal policies aimed at price stability.
Keywords: Economic Growth; macroeconomic Environment; Listed Manufacturing Firms, Financial Performance; Nairobi Securities Exchange.
Title: Macroeconomic Environment and Financial Performance of Manufacturers Listed at the Kenyan Securities Market
Author: Wenslous M. Mwangala, Samuel O. Onyuma, James N. Kung’u
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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