Private sector activity in Kenya improved in January, latest 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 in December

The Kenyan business climate improved considerably for the fourth consecutive months, as 2025 got underway as the output increased and new orders were signed, a Stanbic Bank Kenya Purchasing Managers’ Index (PMI) reveals.
According to the PMI survey, the businesses pointed to difficult economic conditions and a downturn in customer demand, which caused growth to decline to its lowest rate during this period.
Christopher Legilisho, an economist at Standard Bank, said during the period, new orders rose marginally, price pressures remain solid, but ease from December and employment felt for the first time in five months.
“Kenyan businesses reported an increase in purchase prices for imported commodities, albeit a slower one than the preceding month, still attributed to higher taxes. Staff costs remained stable. Output prices increased but less briskly as firms passed on higher input and purchase prices to customers. We would therefore foresee a slight easing in inflationary pressure during January than was the case in December,” Legilisho said.
He said the private sector was confident in January that the business outlook for the next 12 months remained weak, though better than what was reported in December.
The survey also reveals that the 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 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.
It shows that 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.
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.
In many cases, firms reporting higher purchasing costs raised their selling charges accordingly. The overall increase was solid, but the softest recorded in three months. Only 6 percent of surveyed companies gave a positive output projection, with strategic focuses such as new products and services and increased marketing activity reportedly driving these forecasts.