Hiring of staff by corporates in Kenya grew at the fastest rate in 15 months in August, a new tracker report showed Wednesday, signaling confidence in future demand for goods and services.
The latest Purchasing Managers’ Index (PMI) by Stanbic Bank indicated signs of recovery and renewed confidence among corporates in the country after several months of social unrest and a brutal cost-of-living crisis.
The findings of the PMI — a monthly survey which gauges key indicators in the private sector such as output, new orders, and employment — indicate firms have sustained hiring for seven straight months through August.
“Although job creation remained mild, the uplift was the fastest seen in 15 months,” Stanbic Bank Kenya said in the PMI report for August.
“Higher workforce capacity and inventory building allowed firms to reduce their backlogs for the third month running,” it added.
By raising staff, the report suggests corporate managers are defiant of lurking economic headwinds such as weak spending by households and businesses, and elevated operating costs, which have prompted firms to trim output for the last four months amid falling sales.
Households and businesses reportedly delayed spending decisions for non-essential goods and services pending the passing and implementation of the Finance Bill 2025 in June.
The delay was compounded by violent anti-government protests on June 25, 2025, to mark the first anniversary of the historic, deadly demonstrations against fresh IMF-backed taxes in June 2024 and the Saba Saba Day protests on July 7.
The Saba Saba Day is an unofficial annual pro-democracy march to mark the anniversary of the July 7, 1990, demonstrations, which led to a return to multiparty democracy in Kenya. New orders processed by firms in Kenya have been contracting since April, the PMI data suggests, but showed signs of recovery last month.
The headline PMI for August at 49.4 is indicative of a marked improvement in private sector activity from the 12-month low of 46.8 in July.
The reading was just below the 50.0 no-change mark, signaling easing of the decline in business conditions recorded since June.
“Output declined more than new orders due to weak disposable incomes and challenging economic conditions. Nevertheless, firms, especially in manufacturing, are more upbeat about output over the next 12 months, which should imply healthier business activity in the coming months,” Stanbic economist Christopher Legilisho wrote in the PMI.
The report shows output in the agriculture sector contracted in August, pointing to the impact of unpredictable weather and the crushing burden of high input costs earlier in the year, while the construction sector continued to be battered by low demand with households and companies holding off on new projects.
The services sector, particularly hospitality and tourism, also took a hit from aftershocks of social unrest and families still wary of spending on non-essential goods.
Manufacturing and wholesale & retail sectors were the only bright spots, recording expansion compared with July.
The firms appear to be more forward-looking, pouring money into new marketing campaigns, product launches, and the opening of new outlets with the hope of reaping returns in the next 12 months.
The findings of the PMI report —based on feedback from about 400 panelists drawn from agriculture, manufacturing, construction, wholesale & retail, and services— indicate confidence in business prospects in the year ahead has been rising in recent months, reaching a 30-month high in August.
“With a quarter of surveyed firms expressing optimism towards year-ahead output, overall sentiment was the strongest seen for two-and-a-half years. Qualitative evidence showed that new marketing strategies, branch expansions, and product diversification lay behind positive forecasts,” Stanbic Bank Kenya wrote in the PMI report for August.
