The headline Purchasing Manager Index (PMI) rose for the third consecutive month to 52 in April, up from 51.7 in the previous month, reaching its highest level since January 2023. 

The acceleration was mainly driven by stronger customer demand, which led to the fastest rise in new orders in over three years, while job creation picked up and cost inflation remained modest. 

This latest surge, captured in the Stanbic Bank Kenya PMI, signals robust expansion in business activity, with readings above 50 indicating improving conditions.   

Christopher Legilisho, an Economist at Standard Bank, attributed the momentum to a steady improvement in consumer demand, noting that “output and new orders rose due to increased customer sales from marketing.”   

He said employment conditions improved, especially in the services and construction sectors, as firms responded to higher sales and increased workloads.  

The PMI survey showed that job creation quickened to its strongest level in nearly a year, though hiring was largely focused on temporary staff.  

Meanwhile, input purchases rose to meet rising workloads, boosting inventories and supporting further expansion in the private sector. 

“Overall, the April PMI implies a steady return to growth at the start of Q2:25. Further, inflationary pressures remained muted. Despite an improvement in future expectations, sentiment remains among the weakest in the survey’s history,” Legilisho said. 

Despite the upbeat headline numbers, the broader economic context remains challenging for Kenyan businesses.  

While cost pressures picked up amid rising demand-input costs reached a three-month high, driven by supply shortfalls and increased taxation, the rate of inflation stayed below the survey’s long-term average, suggesting that inflationary risks are contained for now.  

Output prices rose at their fastest pace in three months, particularly among manufacturers, as firms passed some of the higher input costs to consumers. 

Sectoral performance was mixed, with services, agriculture, and construction posting robust gains, while manufacturing and wholesale and retail lagged, reflecting uneven recovery across the economy.  

Notably, only 5 per cent of the surveyed firms expect output to grow over the next 12 months, underscoring persistent uncertainty and subdued business confidence despite the recent uptick in activity.