Kenya’s private sector reported the strongest performance in over three years in October, signalling a steady rebound in economic activity and growing business confidence.
The latest Purchasing Managers’ Index (PMI) from Stanbic Bank shows that business activity expanded for the second consecutive month, reaching 52.5 points from 51.9 in September, the highest level since February 2022.
The survey attributes the growth to improved sales, stable supply chains, and a slowdown in input cost increases, all of which created a more favourable business environment. Readings above 50 points indicate growth in private sector activity, while those below mark contraction.
According to the report, firms experienced a notable rise in new business orders, reflecting stronger customer demand and an overall improvement in economic prospects.
The rise in sales encouraged many companies to increase purchasing volumes for the first time since April, while others introduced new products and promotional offers to boost performance.
“The PMI survey indicated a further rebound in the Kenyan private sector following the disruptions caused by protests in the second quarter of the year. Output and new business intakes increased for the second consecutive month, with both growth rates accelerating,” the report stated.
The data further shows that the wholesale and retail sector led the improvement in output, with several firms offering discounts to attract more customers. Other monitored sectors also registered growth, contributing to a broad-based recovery in October.
Businesses also benefited from more efficient supply chains as vendor competition intensified and input demand remained moderate. Delivery times shortened for the ninth straight month, though the pace of improvement slowed slightly compared to September’s record high.
At the same time, firms were able to expand their inventories as supply conditions stabilised. Input costs rose only marginally, marking the slowest rate of inflation in over a year.
Companies cited higher import prices and increased taxes, particularly on fuel and VAT, as key drivers of the modest cost rise. Output prices increased at a similarly slow pace.
Employment levels remained steady across most firms, with limited job creation as companies focused on maintaining existing workforce levels. Backlogs of work also fell as firms cleared pending orders, reflecting improved operational efficiency.
Although optimism about future business conditions eased to a four-month low, confidence remained relatively strong compared to earlier months. Around 20 per cent of the firms surveyed expected output to grow by next October, while the rest anticipated stable conditions.
Economist Christopher Legilisho from Standard Bank said the results reflected faster delivery times, increased competition among vendors, and improved operational performance across the private sector, though some uncertainty about future growth persisted.
