Kenya's private sector continued to expand in February, but at a reduced pace compared with January, according to a monthly survey released on Wednesday. The Stanbic Bank Kenya Purchasing Managers' Index (PMI) declined to 50.4 in February from 51.9 in January. Readings above 50.0 indicate growth in business activity, while those below that mark denote contraction.
The survey attributed the slowdown to softer performances in agriculture and manufacturing. At the same time, construction, wholesale and retail and services sectors provided upward momentum and helped keep the headline index in expansionary territory.
Commenting on the results, Stanbic Bank Economist Christopher Legilisho said: "While the outcome was still expansionary, some businesses were hampered by increased competition and a doubtful economy," and added: "Although macroeconomic conditions have improved, the broader economy has not yet seen the benefits; sections of the private sector are still feeling the strain." These remarks underline that, despite a positive PMI reading, underlying pressures persist in parts of the private economy.
Official forecasts and data reported alongside the PMI point to continued, if uneven, improvement in Kenya's broader economic picture. The finance ministry forecasts that the economy grew by 5.0% in 2025 and expects expansion of 5.3% this year, up from 4.7% in 2024. Meanwhile, data from the country's statistics agency show that inflation eased to 4.3% year-on-year in February from 4.4% in January.
The mixed signals from the PMI and official statistics suggest a private sector that remains on a modest growth footing but one where gains are uneven across industries. Agriculture and manufacturing appear to be the primary sources of weakness in the most recent month, while construction, wholesale and retail and services helped sustain overall expansion. Observers and market participants will likely watch whether the improved macro indicators translate into more consistent gains across the private sector in the coming months.
Data points:
- Stanbic Bank Kenya PMI: 50.4 in February, down from 51.9 in January.
- Finance ministry growth forecast: 5.0% for 2025; 5.3% expected this year, up from 4.7% in 2024.
- Inflation: 4.3% year-on-year in February, down from 4.4% in January (statistics agency).