Paul Arithi 
- Stanbic Bank Kenya PMI® Kenya PMI reaches its highest level in over five Years;
Strongest new business growth since October 2020 Firms register a marked uplift in output Staffing and purchasing growth accelerate
The Kenya PMI® pointed to a strengthening of growth in the private sector economy in November, as business activity and new work both
expanded at the sharpest rates in over five years.
Firms experienced improving customer sales, helped by relatively soft inflationary pressures, as well as successful new product launches and marketing campaigns. Purchases of inputs rose, while employment growth quickened from October.
The headline figure derived from the survey is the Purchasing Managers’ IndexTM (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.At 55.0 in November, the headline PMI
was up strongly from 52.5 in October and at its highest since October 2020.
The upturn was mainly driven by a much sharper increase in sales volumes compared to the previous survey period. Surveyed companies frequently noted that improved purchasing power among customers contributed to higher sales volumes.
This trend was partly linked to a moderation in inflationary pressures, as evidenced by the survey data. In fact, selling charges increased only slightly and at the slowest rate since August, while input costs rose to the smallest extent in 18 months.
Panellists also highlighted the effectiveness of new marketing initiatives, increased customer referrals,and rising demand for innovative
products.
Christopher Legilisho, Economist at Standard Bank commented:
“The Kenya Purchasing Managers’ Index (PMI) put on a fair show in November due to steady and improving business conditions in the private sector.
The stimulus measures by the authorities over the last 12 months are now showing up in the real economy. Purchasing activity and stocks of inventories strengthened as the effects of more enthusiastic consumer spending impelled firms to ramp up to meet expected demand.
“Employment levels ticked up at one of the fastest rates this year due to the improving economic conditions.
“Inflation expectations are anchored, as echoed by the survey. Kenyan businesses reported softer increases in input prices, purchase prices and output prices, while wages costs were unchanged. Although, firms still note rising material prices and higher taxation as impacting their margins.
“However, the survey notes that confidence in the business outlook over the next 12 months is still subdued.
Notably, sales growth was broad-based in November, with all five monitored sectors reporting an increase compared to the previous month.
Business activity expanded at a sharper rate over the course of November.
The pace of growth was the fastest seen in just over five years. Likewise, firms increased their purchases of inputs greatly in November in an effort to meet client demand and shore up inventories.
Supplier delivery times improved during November.Qualitative feedback indicated that increased competition among vendors had driven faster deliveries as they sought to strengthen business relationships.
Coupled with the marked rise in purchases, this contributed to a robust expansion of input inventories during the latest survey period.
Although input demand rose, firms signalled there was little impact on purchase prices.
Where an increase in costs was observed, comments mainly linked this to higher tax burdens.The labour market showed signs of
strengthening in November amid rising demand.
Employment increased for the tenth consecutive month, with the latest growth being the second fastest since
OutPut and Demand;
Output
Activity growth across the Kenyan private sector accelerated markedly in November, indicated by the seasonally adjusted Output Index climbing to its highest level since October 2020. The uplift in business activity was also one of the sharpest recorded in the survey history.
Survey panellists attributed the steep increase in output to stronger market demand.
New orders
Volumes of new business rose for the third consecutive month in November, with the pace of expansion climbing to a sharp rate that was the most pronounced in just over five years.
All sub-sectors experienced growth, as companies highlighted improved client purchasing power, successful marketing strategies, increased referrals, and the launch of new products.
Business expectations
Kenyan firms continued to hold optimistic views about an increase in business activity over the coming 12 months during November.
However, the level of confidence waned, as reflected by a drop in the Future Output Index for the third month running.
Positive expectations often stemmed from planned marketing campaigns, business expansion initiatives and efforts to diversify products and services, according to respondents.
Employment and capacity;
Employment
When adjusted for seasonal variation, the Employment Index recorded in above-50 territory for the tenth consecutive month in November, indicating another rise in staff numbers at Kenyan companies.Moreover, the rate of job creation was the second-fastest in over two years.
All five monitored sectors saw an increase in employment since the previous month.
Backlogs of work
Kenyan firms again managed to deplete their backlogs midway through the final quarter of 2025. Outstanding business has fallen in each of the past six months.
Four out of five sectors saw a drop in backlogs since October.However, a rise in work-in-hand among manufacturers meant that the overall fall was the slowest since June.
Purchasing and inventories;
Quantity of purchases
Consistent with a more pronounced rise in new orders, November data indicated an accelerated increase in input purchases across the private sector.
This growth followed a renewed expansion in October, with the rate of increase reaching its fastest in just over five years. Panellists attributed the surge to higher sales, new project initiatives and greater client activity.
Suppliers’ delivery times
The amount of time taken for inputs to be delivered to Kenyan businesses shortened further during the latest survey period.
Respondents tended to see lead times improve because of increased competition among suppliers, which encouraged faster delivery to maintain business relationships and contracts. Some vendors were also able to deliver more quickly to meet urgent business needs, according to comments.
Stocks of purchases
With purchases rising and lead times quickening, Kenyan businesses saw a solid increase in their stocks of purchases in November. The rate at which inputs were accumulated was the second-quickest in almost three years (following June).
Stocks rose in all categories, with the greatest expansion in construction.
Prices
Input prices
Similar to that seen in October, Kenyan private sector firms registered only a slight increase in input prices halfway through the fourth quarter.
The pace of inflation edged lower and was the weakest seen in the current 18-month sequence. Purchase prices and staff costs both increased at historically subdued rates.
Purchase prices
Some companies reported an increase in purchasing costs over the course of November, which they mostly associated with higher taxation and increased material prices.
However, there was evidence that other cost drivers were relatively muted, prompting the overall rate of purchase price inflation to decelerate further to an 18-month low.
Staff costs
Wage pressures softened at Kenyan businesses in November. Although firms noted a rise in staff costs since the previous month, the uptick was fractional and the slowest since the beginning of the year.
Nearly all surveyed firms (over 99%) reported no change in their employee salaries.
Output prices
Output prices rose only slightly in the latest survey period, as easing cost pressures enabled firms to increase their charges more cautiously. The rate of inflation slowed to its weakest in three months.
While agriculture, construction, and wholesale & retail firms reported an increase in selling charges, this was partly offset by discounts offered by goods producers and service providers.
