Kenya’s private sector is poised for a hiring surge in 2026, with companies signaling plans to expand workforces amid rising demand and strong business confidence.
According to the Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for December 2025, released on Tuesday, firms reported the fastest employment growth since November 2019, reflecting a robust end to the year.
The headline PMI stood at 53.7 in December, down slightly from November’s 55.0, but still indicating a solid improvement in business conditions across the non-oil sector. A reading above 50.0 signals growth compared to the previous month, while a reading below 50.0 shows contraction.
The report points out that rising customer demand and healthy order volumes were key drivers behind the expansion.
“Strong demand conditions are driving new orders, which in turn lift output in the private sector. Firms have increased employment, input purchases, and inventories, positioning themselves for growth in 2026. The PMI suggests that we could see higher inflation in the coming months from improving consumer demand as companies gain confidence,” Economist Christopher Legilisho of Standard Bank noted.
Private sector firms increased their output sharply in December, with higher order books pushing companies to ramp up production.
Sales volumes also rose, supported by factors such as improved tourism, marketing efforts, and competitive pricing. This growth momentum prompted businesses to boost staff numbers to meet both current and anticipated demand.
New orders continued to grow, though slightly slower than November’s five-year high. Nevertheless, companies maintained strong purchasing activity, marking the third consecutive month of increased input buying. This allowed firms to build inventories, secure market positions, and prepare for further growth in 2026.
The Employment Index, a key component of the PMI, reached its highest level in more than six years, signaling widespread job creation across multiple sectors.
Construction saw the largest workforce expansion, driven by ongoing infrastructure projects and other government initiatives, while service and manufacturing firms also increased staffing to handle higher production and sales volumes.
Meanwhile, the Input Prices Index accelerated from November’s 18-month low, while Purchase Prices rose at the fastest pace in three months.
At the same time, companies cited higher taxes, fuel, and materials costs, though wage inflation remained mild while output prices increased to a five-month high, largely in manufacturing, services, and construction.
Businesses expect further growth driven by investment, staffing expansion, diversification, product rebrands, and increased advertising.
