The Kenyan private sector experienced a solid surge in growth in October, with business activity expanding at its fastest rate in nearly four years, according to the latest Stanbic Bank Kenya Purchasing Managers’ Index (PMI) survey.
The headline PMI figure rose to 52.5 in October, up from 51.9 in September. A reading above 50.0 signals improvement in business conditions, making this the second consecutive month of expansion and the highest reading since February 2022.
Key highlights
- Output Skyrockets: Output levels saw their sharpest increase since December 2021, driven by robust demand, new product launches, and promotional pricing. All main monitored sectors reported an upturn in activity.
- Sales Strengthen: New business improved for the second month running, accelerating from September, as the economy continued to rebound from earlier disruptions.
- Purchasing Rises: Encouraged by stronger sales, firms increased their purchasing activity for the first time since April, leading to an expansion in input inventories.
- Inflation Eases: Input cost inflation was at a 13-month low, rising only marginally. This softer price pressure came from both slower increases in purchase prices and overall wage costs.
Christopher Legilisho, Economist at Standard Bank, commented: “Kenya’s private sector in October saw both output and new orders up sharply as conditions improved for consumers and firms benefited from softer inflation. Firms ramped up quantities purchased and increased inventory levels, expecting higher consumer demand. The easing of price pressures implies that while output has improved, it is not fueling demand-driven inflation.”
Mr. Legilisho also noted that the reporting of quicker deliveries reflected increased efficiency and vendor competition. While current conditions are strong, firms showed slightly less optimism about future output conditions, with expectations dipping to a four-month low.