Private sector activity was resilient in the first month of 2025 riding on expansion on output and new orders.
This is according to the latest Stanbic Kenya’s Purchasing Managers Index (PMI) that however says business activity growth slowed to its softest pace in January 2025 as businesses highlighted challenging economic conditions and a slowdown in customers demand.
Companies saw sustained rise in their activity levels and new work intakes in January 2025.
This was attributed to referrals, increased marketing, improved cash flow and an easing of inflationary pressures that underscored the rise in sales.
The latest Stanbic PMI slowed to a reading of 50.5 in January from a reading of 50.6 the previous month.
Readings above 50.5 signal business signal an improvement in business conditions while readings below 50.0 show a deterioration.
During the period, firms reported that they increased stocks purchased and inventories held to cover higher sales as well as the future likelihood of difficulty in finding materials.
Price pressures remained solid, but moderated from December’s 11-month high.
The firms responded by increasing their selling charges further while employment numbers on the other hand dropped for the first time since last August but was relatively stable.
Expectations for business activity over the next 12 months remained the weakest observed on record in January.
Christopher Legilisho, an economist at Standard Bank 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.
Only 6pc 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.
