Kenya's private sector economy maintained solid growth in December, driven by robust customer demand and increased business activity, the Stanbic Bank Kenya Purchasing Managers' Index (PMI) showed on Tuesday.

The headline PMI stood at 53.7 in December, down from 55.0 in November, indicating a continued expansion in business conditions. Readings above 50.0 denote growth, while those below indicate contraction.

Kenyan firms reported a marked rise in activity, sales, and purchases, with employment growth hitting its highest rate since November 2019.

"The Stanbic Bank Kenya PMI stayed in expansion territory, albeit slower this month, implying still strong demand conditions are driving new orders," said Stanbic Bank economist Christopher Legilisho.

Inflationary pressures reaccelerated from November's low, with input prices rising due to increased tax burdens and higher fuel and materials costs. However, the overall rate of input price inflation remained softer than the long-run trend.

Firms increased their purchases and inventories to maintain competitiveness and facilitate faster deliveries. Supplier delivery times improved significantly, reaching their best level since September 2021.

Business expectations for 2026 remained positive, buoyed by plans for investment, diversification, and increased advertising.

"Overall, this suggests that we could see higher inflation in the coming months from improving consumer demand as firms become more confident," Legilisho added.

The survey highlighted that while output prices rose modestly, wage costs saw only a fractional increase, pointing to potential inflationary pressures ahead.