Kenya’s private sector activity returned to growth territory in June 2026, breaking a three-month streak of contraction. The Stanbic Bank Purchasing Managers’ Index (PMI) climbed to 50.0, up from 46.6 in May.
The 50.0 reading indicates that business conditions have effectively stabilized. A figure above 50 signifies expansion, while anything below points to a decline, making this month a critical turning point for local businesses.
Increased customer orders were the primary driver for this recovery. Rising demand helped boost sales, offering a much-needed reprieve for firms that have struggled with declining output throughout the second quarter of 2026.
Despite this stabilization, output growth remained subdued. Businesses continue to navigate a challenging landscape characterized by weak consumer spending power and high operating costs that keep profit margins under pressure.
However, while private sector activity is recovering, the Kenya National Bureau of Statistics reported annual inflation at 6.4% in June. This reflects a slight cooling from the 6.7% recorded in May.
“The latest reading therefore indicated that operating conditions stabilized in June, following contractions in each of the past three months,” the Stanbic Bank PMI said.
Broader economic projections for 2026 remain cautiously optimistic. The Kenyan government targets a 5.0% GDP growth rate for the year, following 4.6% growth in 2025, as the economy attempts to navigate regional macroeconomic headwinds.
