Kenya’s Output Growth Slows To Four-Month Low

Kenyan business conditions improved further as 2025 began, according to the Stanbic Bank Kenya PMI®, with expansions in output and new orders signaled for the fourth month running.

Activity growth nevertheless fell to its softest pace in this sequence, as businesses highlighted challenging economic conditions and a slowdown in client demand.

Price pressures remained solid, but moderated from December’s 11-month high. Firms responded by increasing their selling charges further, whilst staffing numbers dropped for the first time since last August. The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. The headline PMI recorded 50.5 in the first month of 2025, which was little-changed from a reading of 50.6 in December. The index was above the 50.0 neutral mark for the fourth successive month, thereby extending the current period of private sector growth.

Kenyan companies saw sustained upturns in their activity levels and new work intakes during January. Survey panelists commented that new client referrals, increased marketing, improved cash flow and an easing of inflationary pressures underscored the rise in sales.

Firmer stock volumes – as evidenced by a renewed uplift in purchased item inventories – were also cited as supporting activity. Growth momentum regarding output and new orders faded somewhat, however. The latest data signaled that January’s rise in output was the weakest recorded in the current four-month expansionary sequence and only marginal. Sales growth also eased to its slowest since last October.

As a result, Kenyan firms reported a milder uplift in purchasing activity at the start of the year. Similarly, employment numbers fell fractionally, ending a three-month run of growth in the final quarter of 2024. Most respondents kept their staffing levels unchanged.

On prices, the latest survey data offered mixed results in January. Overall input prices continued to rise at a solid pace, which companies largely attributed to the impact of higher taxation on imported material prices. However, the rate of inflation softened from December when it reached its highest level since January 2024.

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