The Stanbic Bank Purchasing Managers’ Index (PMI) for Kenya rose to 50.9 in November from 50.4 in October, indicating a marginal improvement in business conditions.
This marks the highest reading since May.
A PMI reading above 50 signifies an expansion in business activity.
According to the survey, stronger sales growth was recorded, driven by increased customer spending and travel activity, particularly in the wholesale, retail, and services sectors, fueling output growth.
“However, this was not broad-based, but only in the wholesale and retail and services sectors. Sales declined across agriculture, manufacturing and construction.”
However, rising input and output costs were observed, attributed to higher taxes and increased firm spending to support higher sales volumes.
“With positive economic momentum, input and output cost pressures increased due to higher taxes and increased outlays by firms to support higher sales volumes,” Christopher Legilisho, Economist at Standard Bank, said in the report.
On the other hand, while some firms increased hiring, overall job creation slowed in November. Supply chain conditions improved slightly, with shorter supplier delivery times and increased stock levels.
Weak Outlook
Despite the positive November reading, business confidence for 2025 remains subdued, with only 8% of firms expecting growth.
Legilisho noted that while the economic momentum is positive, cost pressures are rising. He also highlighted the need to address the subdued business confidence for long-term growth.
