Kenya’s private sector business up in May – PMI

Kenya experienced a positive shift in private sector business conditions in May, driven by declining costs and increasing new business, resulting in robust activity growth, the sharpest in 20 months.

According to the Stanbic Bank Kenya PMI, input buying also surged. Moreover, job creation continued at a modest pace.

Reduced fuel and import costs led to a further decline in overall input prices, following April’s first drop in nearly four years. Selling prices began to rise slowly, on the other hand.

Kenya’s PMI stood at 51.8, its best performance since January 2023, indicating a moderate improvement in private sector health.

This was largely attributed to easing inflationary pressures. Output increased for the first time since February, especially in services, manufacturing, and wholesale & retail sectors. However, agriculture and construction output decreased due to adverse weather.

Purchasing activity grew at the fastest rate in 20 months, strengthening inventories. Employment rose for the fifth consecutive month.

After a slight decline in April, average prices charged rose marginally in May. Despite a slip in confidence from April’s 13-month high, businesses were still optimistic, reflecting growth projections including branch openings, vehicle purchases, and increased marketing spending.