Kenya’s private sector maintained stability in February, with the PMI rising to 50.6. Growth in agriculture, manufacturing, and construction contrasted with declines in wholesale, retail, and services sectors. Only 5% of firms expect output growth in the coming year, despite optimistic forecasts of 5.3% growth for the economy in 2025 and 2026.
In February, Kenya’s private sector demonstrated stability, expanding at a rate similar to January, according to a recent survey. The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) increased slightly to 50.6 from 50.5 in the previous month, indicating growth in business activity. Sectors such as agriculture, manufacturing, and construction contributed positively to this growth, whereas the wholesale and retail, as well as the services sector, reported declines.
Despite the PMI’s slight uptick, the overall sentiment among surveyed companies regarding business conditions was pessimistic. Stanbic Bank indicated that only 5% of the firms surveyed anticipate an increase in output over the next year. Positive expectations were noted in just three of the five sectors monitored, namely construction, wholesale and retail, and services.
According to the finance ministry, the Kenyan economy is projected to grow by 5.3% in both 2025 and 2026, an increase from the estimated 4.6% growth experienced last year. This growth forecast reflects an optimistic outlook, despite the current challenges faced in certain sectors.
The data presented reveals a mixed picture of Kenya’s private sector performance, emphasizing the growth potential within specific industries while also highlighting underlying concerns about the broader economic climate. As the private sector navigates these conditions, the disparity in sector performance will likely shape future business strategies and investment decisions.
Kenya’s private sector remained stable in February, showing a slight increase in the PMI. Despite the small growth, concerns linger as most surveyed companies predict limited positive output over the next year. The anticipated economic growth rates for 2025 and 2026 provide some hope for an improving economic landscape, yet disparities among different sectors warrant close attention. Overall, the mixed indicators call for strategic adaptations within the private sector.
Original Source: money.usnews.com
