Tough economic conditions slow down private sector customer demand in January
Despite the marginal decline in growth of the business activities, the index report maintained that general business conditions improved further.
Kenya's private business activities slackened in January 2025 on the back of challenging economic conditions and a slowdown in client demand.
The latest Stanbic Bank Kenya Purchasing Managers' Index (PMI), which measures business conditions in Kenya's private sector, dipped marginally to 50.5 in the month under review. This is from 50.6 recorded in the previous month.
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Despite the marginal decline in growth of the business activities, the index report maintained that general business conditions improved further, as the record marks the fourth consecutive month with an above 50-point mark.
Ideally, according to the lender, readings below 50.0 signal a contraction in activity, while those above 50.0 indicate expansion.
Growth momentum regarding output and new orders faded somewhat, with the data signalling that the rise in output was the weakest recorded in the current four-month expansionary sequence.
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," reads the index report.
"Similarly, employment numbers fell fractionally, ending a three-month run of growth in the final quarter of 2024."
Most respondents however kept their staffing levels unchanged.
Commenting on the report, Standard Bank economist Christopher Legilisho said 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.
Looking ahead, he noted that the private sector's confidence in January about the business outlook for the next 12 months remains weak, though better than in December.
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