Nairobi — Kenya's business activities grew in the month of August compared to a similar period in July, buoyed by the cooling of political tensions that were experienced during anti-government demonstrations across the country a few months ago.

The latest Stanbic Bank's Purchasing Managers Index (PMI) survey that was released yesterday shows that the PMI index rose to 50.6 from 45.5, hovering above the 50 mark for the first time in months.

It comes after the state and the opposition agreed to engage in talks, creating room for political tranquility in the country.

"At 50.6 in August, up from 45.5 in July, the headline PMI signaled an expansion in business conditions for the first time since January," read the survey in part.

"However, the index was only slightly above the 50.0 mark, indicating that the expansion was only marginal. After deteriorating at the sharpest rate in almost a year in July," it added.

"Output levels recovered slightly in August. Surveyed companies often noted that greater political stability had helped to boost demand and lead to higher activity, especially in the services and manufacturing sectors where growth resumed."

However, the PMI notes that the improvement was slightly weighed down by a rapid rise in inflation.

"August survey data signaled that inflationary pressures were still historically marked and continued to hit business expenses," the report noted.

"Nearly 38% of firms saw a monthly rise in their input costs, marking one of the sharpest rates of cost."