NAIROBI, Feb 4 - Kenya's private sector grew in January but at a reduced rate compared with the previous month, according to a monthly PMI survey. The Stanbic Bank Kenya Purchasing Managers' Index edged down to 51.9 in January from 53.7 in December. Readings above 50.0 indicate expansion in business activity, while those below 50.0 signal contraction.
The survey highlighted distinct differences across industries. Manufacturing firms were most often the ones to report sales increases. In contrast, firms operating in the construction and wholesale and retail sectors experienced outright falls in demand during the month, contributing to the overall moderation in private sector growth.
Stanbic Bank's commentary accompanying the PMI underlined these sectoral contrasts, noting that sales growth tended to be concentrated in manufacturing, while the construction and wholesale and retail areas saw weaker demand. The drop in the headline PMI from December to January signals a slowing of momentum rather than a reversal of growth, since the index remained above the 50.0 threshold.
Official economic outlooks cited alongside the survey show differing expectations for Kenya's near-term growth. The finance ministry projects that the economy will expand by 5.3% in both 2025 and 2026, up from an estimated 4.7% in 2024. The World Bank, by contrast, expects growth of 4.9% this year and to sustain that rate over the following two years. These projections were presented in the same release as the PMI data.
Overall, January's PMI points to ongoing expansion in Kenya's private sector but highlights a deceleration driven by weaker demand in construction and wholesale and retail, even as manufacturing more frequently reported sales growth. The differing official growth projections underscore that expectations for the pace of economic expansion vary among policymaking bodies and external observers.
Summary
The Stanbic Bank Kenya PMI slipped to 51.9 in January from 53.7 in December, indicating slower private sector growth. Manufacturing firms most commonly reported sales increases, while construction and wholesale and retail sectors saw falling demand. Forecasts for medium-term growth differ, with the finance ministry projecting 5.3% in 2025 and 2026 and the World Bank forecasting 4.9% for this year.
Key sectors impacted
- Construction - reported outright falls in demand.
- Wholesale and retail - experienced decreased demand.
- Manufacturing - most frequently recorded sales growth.