NAIROBI, Kenya— Kenya’s private sector showed tentative signs of improvement in August, as the Stanbic Bank Purchasing Managers’ Index (PMI) climbed to 49.4, up from 46.8 in July, according to the latest survey released by Stanbic Bank and S&P Global.
The increase points to a slower pace of contraction, with businesses experiencing softer declines in output and input purchasing, while inventories recorded a modest rise.
“New orders almost stabilised in August, with softer reductions in output and purchasing,” the Stanbic Bank/S&P Global PMI report noted.
The survey further revealed that employment levels expanded modestly, marking the fastest rate of job creation in 15 months.
Business confidence also surged to its highest level since February 2023, suggesting renewed optimism among firms about the coming year.
Companies cited expectations that diversified products and marketing initiatives would bolster growth prospects.
While new orders fell for the fourth straight month, the decline occurred at the slowest pace seen over this period, indicating a partial recovery in demand.
Softer contractions in output and purchasing allowed firms to rebuild inventories slightly following July’s drop, and companies continued addressing accumulated backlogs efficiently.
Despite ongoing cost pressures, especially from taxes on fuel and other essential inputs, businesses kept output price increases minimal.
The report also noted improvements in vendor performance, with supply chain delays easing compared with previous months, helping operations run more smoothly.
Although the PMI remains below the 50-point mark that separates expansion from contraction, August’s reading reflects a notable improvement from the sharper downturn recorded in July.
Analysts said the data signals a gradual easing of headwinds facing the private sector, even as challenges in consumer demand and purchasing power persist.
“Business confidence rises to a 30-month high,” the report added, highlighting a cautiously optimistic outlook among Kenyan firms heading into the final quarter of 2025.
