Kenyan private sector returns to growth in September as PMI rises to 51.3

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, according to the survey compiled by S&P Global and released on 5 October 2026. A reading above 50.0 indicates improving business conditions.

New orders increased for a fourth consecutive month, while output fell for a seventh straight month. The fall in output was the softest in that run. Firms said stronger orders came from improved market conditions, customer referrals, marketing campaigns and cash injections.

The survey covers about 400 private-sector companies. Manufacturing, construction and services expanded in September, while agriculture and wholesale and retail contracted.

Christopher Legilisho, an economist at Stanbic Bank, described the result as "a demand-led improvement in private sector conditions rather than a broad-based recovery in activity", as quoted by Business Daily on 5 October.

Costs stayed high. About 30 per cent of firms reported higher input costs and only 1 per cent reported lower costs, with fuel, transport and agricultural products the main drivers. Business Daily reported that higher fuel, transport and farm costs, together with material shortages, limited firms' ability to respond fully to stronger demand.

One-fifth of firms raised their selling prices and 2 per cent cut them. The rise in selling prices was the second-fastest since November 2023, behind only June 2026.

Employment rose for a fourth consecutive month, with companies pointing to growing workloads and backlogs. Firms also resumed buying inputs after four months of decline and rebuilt stocks.

On 30 September, the Kenya National Bureau of Statistics said annual inflation rose to 6.8 per cent in September from 6.6 per cent in August.

Legilisho said, as quoted by The Star on 5 October, that "sustained expansion will depend on easing cost pressures and improving the availability of inputs; otherwise, stronger demand could increasingly translate into higher prices rather than significantly higher output."