Kenyan companies raised their selling prices in September, marking a modest reversal after August’s 12-month low, according to the latest Stanbic Bank Kenya Purchasing Managers’ Index (PMI).
- •The survey shows that while firms continued to face higher taxes and rising input costs,particularly for fuel and food, the rate of increase in overall expenses slowed compared to earlier in the year.
- •This easing of cost pressures allowed businesses to adjust their charges only slightly, signalling caution in passing costs on to consumers
- •The PMI rose to 51.9 in September from 49.4 in August, crossing the neutral 50-point threshold for the first time since April. The upturn reflected stronger sales, improved output and renewed hiring.
Nearly a third of businesses surveyed reported higher activity, with agriculture and manufacturing leading job creation.
Even so, the pricing environment remained restrained. Just 8 percent of firms reported raising fees during the month, largely to cover tax-related expenses and higher commodity costs. “The rate of inflation was modest, despite accelerating from August’s low,” the report said.
Faster delivery times, the strongest improvement in four years, and better inventory positions also helped ease pressure on firms. With suppliers competing more aggressively, businesses saw reduced wait times and modest increases in input stock.
Looking ahead, most companies remain cautiously optimistic. Many plan to expand product offerings and ramp up marketing, but analysts warn that fragile demand could limit how much of the cost burden can be passed to consumers.
“Business conditions expanded in September, implying the start of a recovery after the disruptions that followed protests in Q2,” said Christopher Legilisho, economist at Standard Bank. “Firms reported a moderation in the rate of input price inflation, though concerns about higher taxes and commodity prices remain.”