Kenya’s private sector is experiencing a resurgence in business deals after seven months of stagnation, fueled by a reduction in political tensions and moderating food prices. According to the latest Stanbic Kenya Purchasing Managers Index (PMI) survey, companies have increased their output in August, leading to a significant rise in hiring, marking the fastest hiring rate in two years.
The renewed growth in output is a pivotal moment for Kenya, as it’s the first positive sign since January. The survey collected feedback from approximately 400 managers spanning key economic sectors such as agriculture, manufacturing, construction, wholesale, retail, services, and mining.
This positive development coincides with a thawing of political tensions between the ruling party and the opposition. In July, violent anti-government protests erupted over the rising cost of living, prompting business closures and investor uncertainty.
The resolution came in August when the ruling coalition and the opposition reached an agreement on a 10-member bipartisan national dialogue team, tasked with addressing issues arising from the disputed 2022 presidential election. This bipartisan approach is seen as a critical step towards political stability and economic recovery.
The PMI reading for August stood at 50.6, crossing the critical threshold of 50, which separates growth from contraction in monthly private sector activity. Firms have been consistently hiring for the past six months, reflecting a boost in existing teams and support for sales activities. This prolonged expansion in the workforce is the longest recorded since the beginning of 2022.
While this growth is promising, the report notes that businesses have had to cope with the higher cost of living and rising inflation, which led to increased wage demands. However, Kenya’s inflation slowed to 6.73 percent in August, offering some relief.
Despite these challenges, corporate production and sales have shown mild improvements. The report suggests that economic growth may continue to recover in the coming months, but tough business conditions and inflation pressures remain concerns.
Approximately 20 percent of surveyed corporate managers anticipate an expansion of business activity in the near future, with some planning to open new outlets and diversify their range of products and services.
![President William Ruto flanked by Environment CS Aden Duale. [PCS]](https://newstrends.co.ke/wp-content/uploads/2025/02/President-William-Ruto-flanked-by-Environment-CS-Aden-Duale-PCS-768x480.jpg)
