Kenya's private sector activity picked up pace in May, helped by falling fuel prices and cheaper imports due to a stronger shilling, a business survey showed on Wednesday.

The Stanbic Bank Kenya Purchasing Managers' Index (PMI) rose to 51.8 in May from 50.1 a month earlier, marking its fastest expansion since January 2023. Readings above 50.0 signal growth, while those below point to contraction.

"Lower fuel prices supported activity growth at many businesses, with some firms also commenting on increased new orders," Stanbic Bank Kenya said in comments accompanying the survey.

"Output rose in the services, manufacturing and wholesale & retail sectors, but fell in agriculture and construction, often due to heavy rainfall."

While they have now subsided, heavy rains and flooding since March have killed at least 315 people, according to government statistics. The rains also destroyed farms, houses, roads and bridges across the country.

While inflation rose slightly to 5.1% year-on-year in May from 5.0% in April, fuel prices fell during the month, data from the statistics office showed.

The shilling has eased from its strongest level this year hit in April, but remains up by 20% against the dollar so far in 2024.

"Input prices fell in May for a second month, with respondents noting a decline in fuel prices and lower imports costs due to a more favourable exchange rate," Christopher Legilisho, an economist at Stanbic Bank, said. (Reporting by George Obulutsa Editing by Christina Fincher)