Kenya’s Economy, Private Sector Record Highest Growth In 10 Months
Kenya’s private sector activity expanded at its fastest pace in 10 months in March, helped by improved performance in most sectors apart from manufacturing, which experienced a contraction, a survey showed on Friday.
Business activities in March 2025 climbed to the highest level in ten months, as strengthening demand conditions led to a solid increase in new orders across the private sector economy.
According to the Stanbic Bank Kenya Purchasing Managers’ Index (PMI) jumped to 51.7 in March – the highest reading since last May – from 50.6 in February. Readings above 50.0 signal growth in activity.
The latest survey indicates the economy registered its fastest increase in sales since January 2023, and as a result, businesses also raised their activity and purchases of inputs solidly, but hiring growth remained subdued.
The headline PMI rose from 50.6 in February to 51.7 in March, indicating a stronger improvement in business conditions at the end of the first quarter of 2025. It was also the highest reading since May 2024 and above the series average of 51.2.
Kenyan firms especially highlighted a sharper increase in new business inflows in the latest survey. The rate of growth accelerated to its fastest in just over two years. Panellists often reported gaining new customers and seeing positive impacts from marketing and favourable weather conditions.
However, some firms found it difficult to boost sales due to inflationary and cash flow pressures on customers.
The uplift in sales supported a faster expansion in business activity across the private sector economy in March. Output increased at the quickest pace since May 2024, with firms generally indicating that they were able to boost activity to match order volumes.
Most of the sectors monitored by the survey registered growth in output and sales. The only laggard was manufacturing which saw fresh contractions in production and new orders.
Rising sales meanwhile encouraged private sector firms to increase their purchasing of inputs.
Notably, the pace of growth was the sharpest in two-and-a-half years, offsetting a brief reduction in February. Higher purchasing contributed to a modest accumulation of input stocks.
