Nairobi, April 4 -- Kenya's private sector activity dropped in March, reversing gains a month ago after some companies experienced cash flow challenges while consumer demand also dropped, according to a closely watched monthly survey.

Stanbic Kenya Purchasing Managers Index (PMI) - a measure of private sector activity such as output, new orders and employment- fell to 49.7 compared with 51.3 in February.

PMI readings above 50 signal growth in business deals over the previous month, while levels below that mark point to a contraction.

Private sector activity had shown glimmers of recovery in February after posting the first growth since August last year on the back of rising demand for goods and services, which prompted firms to increas...