Kenya’s private sector experienced a slight improvement in business conditions in October, with activity levels and employment showing positive growth, according to the Stanbic’s Purchasing Managers’ Index (PMI) for the month of October 2024.
The headline PMI rose to 50.4 in October from 49.7 in September, signaling a marginal upturn in the health of the private sector. A PMI reading above 50.0 indicates growth, while a reading below that level suggests contraction.
October marked the second increase in business activity within three months, driven by rising sales and increased client interest. This occurred despite ongoing challenges such as cash flow issues and political uncertainty.
Employment levels also saw a modest rise for the first time since July. “Despite the slight rise in output, many firms continued to struggle with cash flow constraints, tough economic conditions, rising costs, and political uncertainty,” the survey reported.
Purchasing efforts accelerated, leading to the most significant increase in inventories since August 2023. Firms were stocking up in anticipation of new customers. Input cost pressures remained mild, leading to only a slight rise in average prices charged.
Confidence regarding future business activity rose to a four-month high, with firms planning to open new outlets and invest in products and marketing. However, sentiment remained subdued compared to historical trends.
While input prices rose modestly due to higher tax payments and material costs, reduced fuel prices helped keep overall cost burdens lower than the previous year. As a result, the increase in selling prices was among the slowest in nearly four years.
This slight improvement in business conditions, despite ongoing challenges, reflects a cautious optimism within Kenya’s private sector as firms look toward future growth and expansion.
