Kenya’s private sector recorded a softer contraction in August, with the Stanbic Bank Kenya Purchasing Managers’ Index (PMI) rising to 49.4 from July’s 12-month low of 46.8.
The latest reading, though still below the 50.0 neutral mark, points to a near recovery in business conditions after months of weak sales and protest-related disruptions. Output, new business, and purchasing all declined at slower rates, while employment grew at the fastest pace in 15 months.
Stanbic Bank noted that companies expressed greater confidence in the outlook, with business optimism climbing to its highest level in two-and-a-half years. Firms cited new marketing efforts and diversified product offerings as key drivers of anticipated growth.
“Although the index remains in negative territory, the softening decline is an encouraging sign that demand is beginning to stabilise,” said Christopher Legilisho, Economist at Standard Bank.
The report showed that new orders fell for the fourth straight month, but at the slowest pace over the period. Improved supplier performance contributed to the fastest reduction in delivery times since October 2021.
On the cost front, input prices rose sharply in August, largely due to higher taxes on items such as fuel. However, the pace of inflation slowed for the first time in five months. Output charges were only marginally increased as firms sought to stimulate demand.
The PMI survey, compiled by S&P Global from responses of around 400 companies, tracks trends across agriculture, manufacturing, services, construction, retail and wholesale sectors.
