Kenya's economy showed its strongest signs of life in years this November, as the private sector expanded at a pace not seen since October 2020. This surge, driven by robust consumer demand and easing inflation, has directly translated into the fastest rate of job creation in over two years, providing a welcome boost to Kenyan households.

The closely-watched Stanbic Bank Kenya Purchasing Managers' Index (PMI) soared to 55.0, a significant jump from 52.5 in October. Any reading above 50.0 signals growth, and this latest figure marks the third consecutive month of expansion, indicating a solidifying recovery. This performance is one of the sharpest recorded in the survey's history.

Demand Drives Unprecedented Growth

The primary driver behind this economic upswing is a sharp increase in new orders and business activity. Companies across all five monitored sectors—including agriculture, manufacturing, construction, retail, and services—reported a notable rise in sales. Many firms attributed this to improved purchasing power among customers, successful marketing campaigns, and the launch of new products.

This spike in demand has had a direct ripple effect on the job market. Key findings from the report include:

• Employment has now risen for ten straight months.
• The rate of hiring in November was the second-fastest recorded since August 2023.
• Firms increased their purchasing of materials at the quickest pace in over five years to keep up with orders and rebuild their inventories.

This suggests growing confidence among employers who are now more willing to expand their workforce to meet the rising workload.

Cautious Optimism Amid Lingering Headwinds

While input cost inflation softened to an 18-month low, some businesses noted that higher tax burdens continue to squeeze their margins. Despite the strong performance, long-term business confidence has eased for the third month in a row, suggesting a degree of caution about the future.

Economists note that government stimulus measures introduced over the past year are now visibly impacting the real economy. Both the World Bank and Kenya's finance ministry have projected positive GDP growth for 2025 and 2026, citing the rebound in private sector activity as a key driver. The World Bank forecasts 4.9% growth for 2025, while the finance ministry is even more optimistic, predicting 5.3%.

For the average Kenyan, this private sector revival holds the promise of more stable employment and increased household income. However, the persistent challenges of high taxes and a cautious long-term outlook mean the path to a full economic recovery requires sustained momentum and supportive policies.