Kenya Business Activity Turns Up: Stanbic PMI Rises to 51.3 as New Orders GrowKenya Business Activity Turns Up: Stanbic PMI Rises to 51.3 as New Orders Grow
Key Highlights
- Kenya's private sector returned to growth in September, with the Stanbic Purchasing Managers' Index rising to 51.3 from 49.7 in August, its strongest reading since January.
- New orders rose for a fourth straight month, yet output fell for a seventh month, leaving firms selling more while producing slightly less.
- About 30% of firms reported higher input costs, and selling prices rose at the second-fastest pace since November 2023, which keeps pressure on shoppers.
Kenya's private sector returned to growth in September, with the Stanbic Bank Kenya Purchasing Managers' Index (PMI) climbing to 51.3 from 49.7 in August, the strongest reading since January.
A reading above 50 signals improving business conditions, so the move lifts the index out of contraction. For households and employers, the catch is that the recovery is demand-led and arrives with rising costs.
Orders lead the recovery
The survey, compiled by S&P Global for Stanbic Bank Kenya, shows new orders rose for a fourth consecutive month and at a faster pace than in August. Firms credited stronger market demand, customer referrals, marketing and cash injections.
Employment also rose as workloads and unfinished orders grew. Companies bought more inputs for the first time in five months and rebuilt stocks for the first time since June.
Output told a more cautious story. It fell for a seventh straight month, though the decline was slight and the smallest of the run, with high costs and scarce farm goods holding production back.
Manufacturing, construction and services expanded in September. Agriculture, wholesale and retail remained under pressure, according to Stanbic economist Christopher Legilisho.
Costs keep pressing on prices
About 30% of surveyed firms reported higher input costs, against 1% that reported falls, with fuel, transport and farm products the main pressures. Selling prices rose at the second-fastest pace since November 2023, behind only June 2026, as businesses passed costs on to customers.
That squeeze matches official figures. Mwenendo earlier reported on how Kenya's Central Bank held its rate at 8.75% as annual inflation rose to 6.8% in September from 6.6% in August, with transport prices up 15.6% year on year.
Legilisho described the near-term outlook as "cautiously positive" and called the improvement "a demand-led improvement", warning that growth "may remain modest and increasingly inflationary".
What it means for businesses and workers
For a shopkeeper or manufacturer, rising orders are welcome only if margins hold. Firms are buying stock again and hiring, but they are doing so while fuel and transport bills climb.
As Mwenendo earlier reported, pump prices rose sharply this month, which could add to costs in the October survey. The next reading will show whether demand can keep growing as those costs work through the economy.
The survey covered about 400 private firms between 10 and 28 September 2026, and its findings reflect those firms' own reports rather than official output data.
In Summary
- Who compiles the index?
- S&P Global compiles the Stanbic Bank Kenya PMI from a survey of about 400 private firms.
- What did the index show?
- The PMI rose to 51.3 in September from 49.7 in August, the strongest reading since January.
- When was the survey run?
- Between 10 and 28 September 2026, with results released on 5 October.
- Which sectors expanded?
- Manufacturing, construction and services grew, while agriculture, wholesale and retail stayed under pressure.
- Why does it matter?
- New orders grew for a fourth month, but about 30% of firms reported higher input costs and selling prices rose fast.
- How strong is the outlook?
- Stanbic economist Christopher Legilisho called it cautiously positive, with growth likely to stay modest and inflationary.