Kenyan businesses increased their stockpiles at the fastest rate in four years in October, as companies prepared to meet rising customer demand amid improving economic activity.
The latest Stanbic Bank Kenya Purchasing Managers’ Index (PMI) report released on Wednesday, November 4, 2026, shows that the rate of inventory accumulation reached its highest level since October 2022, signalling increased purchasing activity among private sector firms.
The development came as businesses recorded stronger sales and new orders, prompting companies to purchase more raw materials and other inputs to support their operations.
According to the report, the rate of growth in purchasing activity accelerated to its fastest pace since January 2026, with businesses attributing the increase to stronger customer demand.
The report noted that companies were also able to build up their inventories as suppliers became more responsive to delivery requests.
“Firms also signalled they were able to build up their inventories in October. Notably, the seasonally adjusted Stocks of Purchases Index reached its highest level in exactly four years,” the report stated.
The increase in stockpiling was particularly evident in manufacturing, agriculture and services, where businesses recorded higher input inventories.
However, construction and wholesale and retail businesses experienced reductions in their stocks, highlighting differences in how various sectors were responding to changing market conditions.
The improvement in inventory levels coincided with a significant reduction in supplier delivery times, which shortened at the quickest rate since September 2021.
The report attributed the improvement partly to increased competition among vendors, who became more responsive to companies' delivery requests.
“Qualitative evidence widely suggested that vendors were more responsive to delivery requests because of high competition, although there were still some reports of material shortages and transport delays,” the report stated.
The increase in purchasing activity came against the backdrop of stronger business performance, with Kenya's headline PMI rising to 52.5 in October from 51.3 in September. A PMI reading above 50 indicates an improvement in business conditions compared with the previous month.
The October reading marked the strongest performance recorded in 2026 so far, with private sector output increasing for the first time in eight months.
New orders also increased for the fifth consecutive month, recording their strongest growth in almost a year as businesses reported increased customer referrals, higher footfall and new contracts.
Manufacturing recorded the fastest increases in output and new orders among the five monitored sectors, while construction was the only sector to register declining sales.
Despite the improving business environment, companies continued to face significant financial pressures that threatened to limit their expansion.
The report revealed that input cost inflation accelerated to its highest level since November 2023, with businesses citing higher fuel and transport expenses.
Approximately 36 per cent of surveyed firms reported increased input costs in October, compared with just two per cent that recorded a reduction.
Rising expenses also pushed businesses to increase their selling prices as they attempted to protect profit margins and pass higher purchasing costs to customers.
Meanwhile, employment increased for the fifth consecutive month, although the pace of job creation remained modest and was the slowest in the current five-month expansion.
Commenting on the findings, Stanbic Bank economist Christopher Legilisho said stronger demand had supported the improvement in private sector activity, but warned that rising costs and cash-flow difficulties remained major constraints.
The report was compiled by S&P Global from responses provided by approximately 400 private sector companies operating in Kenya.
