Kenya’s private sector expands for the first time since April, with the Stanbic Bank PMI climbing to 51.9 in September on renewed demand and job growth.
Nairobi, Oct. 4 — Kenya’s private sector activity rebounded in September 2025, marking the first expansion since April, as stronger demand lifted output and new orders, according to the latest Stanbic Bank Kenya PMI survey.
The Purchasing Managers’ Index (PMI) rose to 51.9 from 49.4 in August as confidence rose, signalling growth in business activity. The data, released on Friday, indicate a return to expansion following months of subdued performance caused by high inflation, political protests, and weak consumer spending.
“Business conditions expanded in September, implying the start of a recovery after the disruptions that followed protests in Q2:25,” said Christopher Legilisho, Economist at Standard Bank. “New orders and output strengthened as consumer demand improved, despite some firms reporting caution from clients due to still challenging economic conditions.”
Hiring Strengthens to a Two-Year High
The rise in demand triggered the fastest increase in employment since May 2023, as firms expanded staff capacity to meet growing orders. Improved labour availability helped businesses reduce backlogs for a fourth straight month.
On the supply side, delivery times improved at the strongest pace in four years, aided by stabilising supply chains and the easing of earlier protest-related disruptions.
While purchasing activity remained subdued due to previous months of weak sales, inventory levels grew as companies anticipated stronger business momentum in the final quarter of the year.
Cost Pressures Ease Despite Higher Inflation
Firms reported a slowdown in input price inflation, the weakest since May, reflecting improved supply stability. The moderation came even as headline inflation edged up slightly to 4.6% in September from 4.5% in August, driven by food, transport, and housing costs, data from the Kenya National Bureau of Statistics (KNBS) showed.
“Firms reported a moderation in the rate of input price inflation in September, despite some businesses remaining concerned about higher taxes and commodity prices,” Legilisho added.
Nonetheless, businesses increased selling prices at a slightly faster rate than in August, citing higher taxes, fuel, and food costs, in line with government fiscal adjustments earlier in the year.
Uneven Recovery but Confidence Holds Strong
The recovery remains uneven across sectors. The construction industry recorded a sharp contraction, while retail, services, and manufacturing sectors benefited from renewed marketing efforts and consumer optimism.
Despite these differences, business confidence stayed near a three-year high, with firms expressing optimism about expanding outlets, launching new products, and investing in digital marketing to drive future growth.
“Encouragingly, business prospects for the upcoming year were still strong, albeit far off from historical trends,” Legilisho said. “This implies that, while conditions for some firms have been improving, most still experience the business environment as challenging.”
Broader Economic Outlook
Kenya’s economic growth has shown signs of resilience in 2025, supported by agriculture recovery, a stable Kenyan shilling, and ongoing public infrastructure investment under the government’s Bottom-Up Economic Transformation Agenda (BETA).
Analysts expect growth to accelerate in late 2025, helped by lower inflation and improving credit access. The Central Bank of Kenya (CBK), which has kept its benchmark lending rate at 13.0%, is monitoring inflation trends and private-sector lending closely ahead of its next policy review.