NAIROBI, Sept 4 (Reuters) – Kenya’s private sector activity picked up in August as firms recovered from disruption caused by anti-government protests the previous month, a survey showed on Wednesday.

The Stanbic Bank Kenya Purchasing Managers’ Index rose to 50.6 in August from 43.1 a month earlier. Readings below 50.0 signal a contraction in activity, while those above 50.0 indicate expansion.

“The Stanbic Bank Kenya PMI indicated a mild recovery in business conditions during August as the impact of protests faded, allowing firms to broadly resume normal operations,” Stanbic Bank Kenya said in comments accompanying the survey.

The July figure was a drop from 47.2 in June and reflected the effects of protests against the government during both months which disrupted some business activity.

In June, President William Ruto discarded the government’s finance bill for the year, which contained tax hikes worth 346 billion shillings ($2.69 billion), following deadly street protests.

“Output increased across three of the five broad sectors covered by the survey, with renewed growth in services, wholesale & retail and construction,” Stanbic Bank Kenya said.

“By contrast, there were declines in activity across manufacturing and agriculture.”

The survey painted a gloomy outlook, with most of those polled expressing pessimism over economic prospects for the next 12 months, and only 5% of companies saying they expected growth.

“Business expectations worsened in August, implying firms as less hopeful about output over the next 12 months,” Christopher Legilisho, an economist at Stanbic Bank, said.

(Reporting by George Obulutsa; Editing by Christina Fincher)