Kenyan companies offered more discounts in October to attract customers as demand improved and inflation pressures eased, helping business activity grow at its fastest pace in more than three-and-a-half years.
- •The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) rose to 52.5 in October from 51.9 in September, marking a second month of expansion and the strongest reading since February 2022.
- •Businesses cited promotional pricing and new product launches as key factors behind rising sales, according to the survey.
- •The wholesale and retail sector saw the biggest use of discounts to stimulate demand.
“Conditions improved for consumers as firms benefited from softer inflation,” said Christopher Legilisho, economist at Standard Bank. “Low price pressures imply that, while output conditions have improved, they are not fueling demand-driven inflation.”
Input cost inflation eased to its slowest pace in 13 months, driven by milder increases in import and wage costs, the survey showed. However, some firms pointed to higher taxes, including recent rises in VAT and fuel duties, as ongoing cost concerns.
Firms increased purchases for the first time since April and reported faster supplier deliveries for a ninth straight month, helped by more competitive pricing among vendors.
Despite the stronger sales momentum, companies were less optimistic about future output, with confidence dipping to a four-month low. One in five firms still expects growth over the next year.