Kenya PMI rose to 52.5 in October from 51.3 in September, and the survey shows firms selling more, hiring slowly and raising prices as fuel and transport costs climb.
The Stanbic Bank Kenya Purchasing Managers’ Index, compiled by S&P Global, stayed above 50 for a second month. A reading above 50 means business conditions improved on the previous month.
S&P Global collected responses from a panel of about 400 private sector companies between 12 and 28 October 2026. It published the results on Wednesday 4 November.
Kenya PMI reached its highest reading of 2026
The October figure topped every monthly reading this year. Output grew for the first time since February, with 31% of surveyed firms reporting higher output and 23% reporting lower.
New orders rose for a fifth month and at the fastest rate in almost a year. Firms cited customer referrals, greater footfall (more customers visiting premises) and new tenders and contracts.
Manufacturing posted the fastest rise in output and new orders among the sectors monitored. Construction was the only sector to report lower sales than in September.
Christopher Legilisho, economist at Stanbic Bank, said: “Kenya’s Stanbic PMI improved markedly in October due to stronger output and sustained new orders activity.”
Fuel and transport costs lift what firms pay and charge
About 36% of firms reported higher input costs in October, against 2% that reported a fall. Input cost inflation reached its fastest rate since November 2023 and edged above the June high.
Firms most often cited fuel and transport costs. Suppliers also raised fees after product shortages and inflation, and about 37% of firms reported higher purchase prices.
Firms raised their own selling prices at the second fastest rate in three years, behind only June 2026. They said they aimed to protect margins and pass on higher purchase costs. Staff costs rose only slightly.
What does the survey mean for prices, jobs and suppliers?
Firms charged customers more in October, and the cost pressure came mainly from what they paid for inputs. Legilisho said the survey “points to firmer demand and improved confidence, but the recovery remains constrained by price pressures”. He also listed cash flow difficulties and a modest hiring response as constraints.
Employment rose for a fifth month and across all sectors, but at the slowest rate of that run. Legilisho said stronger demand “is stretching operating capacity”.
Backlogs, meaning work ordered but not yet finished, rose at the fastest rate in exactly seven years. Some firms blamed funding gaps and processing delays as well as demand.
Suppliers delivered faster than in any month since September 2021, as vendors responded to competition. Some firms still reported material shortages and transport delays.
Firms built inventories at the fastest rate in exactly four years. Manufacturing, agriculture and services held more stock, while construction and wholesale and retail held less.
51% of firms expect higher activity in a year
The share of firms expecting higher activity in 12 months rose to 51% from 31% in September. The Future Output Index, which measures that expectation, reached its highest level since March 2020.
Firms linked their outlook to planned expansions, new products and services, marketing campaigns, investments and operational improvements. Confidence rose in all five monitored sectors, with manufacturing standing out.
Output had not grown since February
The headline index stood at 51.3 in September, when the survey also showed business conditions improving. Output last grew in February, and sales volumes have risen for five straight months since.
The Kenya National Bureau of Statistics (KNBS) reported that inflation rose to 7.3% year on year in October from 6.8% in September. The PMI price readings come from firms’ own reports on costs and charges.
