According to survey results released on Monday, October 5 ,Kenya's private sector returned to growth in September, with the Stanbic Bank Kenya Purchasing Managers' Index (PMI) rising to 51.3 from 49.7 in August, signalling a modest improvement in business conditions.
The reading is back above the 50.0 mark that separates improvement from deterioration. It matches July as the joint-fastest improvement since January. The PMI is compiled by S&P Global for Stanbic Bank from a monthly survey of about 400 private companies and the September data was collected between September 10 and 28.
Stronger customer demand and new orders drove the recovery, with new business rising for the fourth consecutive month. Firms also increased purchasing and inventories and employment continued to grow.Firms pointed to high fuel, transport and agricultural input costs, as well as shortages of materials. Agriculture and wholesale and retail reported reduced activity, while manufacturing, construction and services all expanded.
Cost pressures are feeding through to prices. About 30 percent of firms reported higher input costs and output price inflation was the second-fastest since November 2023, behind only June 2026. This comes as annual inflation rose to 6.8 percent in September from 6.6 percent in August.
Stanbic Bank economist Christopher Legilisho said the rise points to a demand led improvement rather than a broad-based recovery in activity. He described the near term outlook as "cautiously positive", but said sustained growth will depend on easing cost pressures and improved input availability. Otherwise, he warned, growth may remain modest and increasingly inflationary.
