Kenya Private Sector Shrinks the Most in 11 Months

The Stanbic Bank Kenya PMI fell to 48.6 in June 2025 from 49.6 in the previous month, marking its second consecutive month of contraction. The latest reading also represented the steepest decline since July 2024, driven by contractions in output and new orders amid weaker consumer spending, challenging economic conditions, and operational disruptions from protests. Meanwhile, employment increased for the fifth consecutive month, albeit only marginally. Additionally, vendor performance improved to the greatest extent in nearly two years. On prices, input price inflation accelerated to a five-month high, while output price inflation moderated to a four-month low amid efforts to maintain the customer base. Finally, business sentiment strengthened to its highest level since May 2024, fueled by hopes of improved sales and market expansion.

The Stanbic Bank Kenya PMI edged higher to 50.6 in February 2025 from a three-month low of 50.5 in the previous month, marking its fifth consecutive month of expansion. Output accelerated for the fifth straight month, growing at the fastest pace since November 2024, primarily driven by a more favorable economic environment that boosted demand. Moreover, new orders increased for the fifth consecutive month, supported by improving cash flows, milder price pressures, and the introduction of new products and services. Additionally, employment rebounded to a four-month high, although the increase remained modest. On the pricing front, input costs continued to soften in February, rising at the slowest pace in four months, primarily attributed to a more moderate increase in purchase prices. Finally, business sentiment for the year ahead dropped to one of its lowest levels on record in February, reflecting concerns over the broader economic outlook and intensifying competition in the market.