Kenya's private sector activity fell to its softest pace in January slowing the hiring of new workers as businesses grappled with a challenging economy and a slowdown in demand, StanBic Bank PMI survey shows. 

The headline PMI recorded 50.5 in the first month of 2025, which was little-changed from a reading of 50.6 reported in December. However, the index was above the 50.0 neutral mark for the fourth month in a row.

“The Kenyan Purchasing Managers Index (PMI) expanded for a fourth month running in January but at a slightly weaker pace than in the two preceding months, reflecting the ongoing resilience of the private sector at the start of this year," said Christopher Legilisho, Economist at Standard Bank.

He added, "firms reported increases in both output and new orders, implying higher sales, more marketing, client referrals, and lower inflationary pressures. Firms were able to increase stocks purchased and inventories held — to cover higher sales as well as the future likelihood of difficulty in finding materials. Some firms nevertheless reported harsh economic conditions. Still, employment conditions were relatively stable."

Employment

Meanwhile, after posting growth for three consecutive months, the number of new jobs reported declined in January with vast majority of monitored companies keeping their workforces unchanged since December.

Overall, the survey shows that Kenyan private sector business conditions improved at the start of 2025 with expansions in output and new orders for the fourth consecutive month.

On prices, the latest survey offered mixed results as overall input prices continued to rise at a solid pace with firms attributing it to the impact of higher taxation on imported inputs.

Looking ahead, expectations for business activity over the next 12 months remained weak. Only 6 percent of the surveyed companies gave a positive output projection, with strategic focuses such as new products and services and increased marketing activity reportedly driving these forecasts.

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