Kenya's private sector activity contracted slightly in March, hurt by cashflow problems at some businesses, a business survey showed on Thursday.

The Stanbic Bank Kenya Purchasing Managers' Index (PMI) fell to 49.7 in March from 51.3 a month earlier. Readings above 50.0 signal growth, while those below point to a contraction. In February, it was the first time since August that the figure had gone above 50.

"Output contracted modestly, which survey panellists attributed to lower new order intakes and cash flow problems," Stanbic Bank said in commentary accompanying the survey.

"The decline in new orders signalled by the survey was only fractional, however, as firms reported an easing of price pressures that supported customer spending."

Kenya's shilling is up 19% against the dollar so far this year. The prices of fuel also fell in the latest regulator review for the month ending on April 14.

"Firms noted input, purchasing and output price pressures as easing due to fuel prices declining further, and a stronger shilling against the USD (dollar) in March," Christopher Legilisho, an economist at Stanbic Bank, said. (Reporting by George Obulutsa; Editing by Hugh Lawson)