Kenya’s private sector witnessed its strongest growth momentum in over two years in April 2025, according to the latest Stanbic Bank Kenya Purchasing Managers’ Index™ (PMI) report. The headline PMI climbed to 52.0, its highest reading since January 2023, reflecting a third consecutive month of expansion. Any figure above 50.0 signifies an improvement in business conditions compared to the previous month.
This upward trend was underpinned by robust increases in new orders, output, input purchases, and employment, with the services, agriculture, and construction sectors reporting the most notable gains. New business volumes rose at the fastest pace since February 2022, fuelled by stronger demand and enhanced marketing efforts, while overall output expanded solidly.
According to Christopher Legilisho, Economist at Standard Bank, “The Kenya PMIs for April reveal a private sector expanding robustly, and at the fastest pace in over two years. Output and new orders rose due to increased customer sales from marketing, implying a steady improvement in consumer demand conditions.”
April saw 34% of surveyed firms report increased output, often citing improved customer footfall and subdued cost pressures. The pace of output growth was the strongest recorded in 11 months, despite 29% of businesses noting declines, frequently attributed to ongoing economic challenges.
Employment rose for the third month in a row, with the fastest increase in nearly a year. Most of the hiring focused on temporary staff to support growing workloads. This helped contain capacity pressures, as seen in only a marginal rise in backlogs of work.
Firms responded to demand by ramping up input purchases, marking the sharpest increase since February 2022. Inventory levels also rose moderately, while supplier delivery times improved for the third straight month, although weather-related delays were reported by some respondents.
Input cost inflation ticked up slightly in April but remained mild by historical standards. Just 5% of firms reported a rise in input costs, with manufacturers bearing the brunt of these increases, while the agricultural sector saw minimal changes. Rising taxation and supply shortfalls contributed to an increase in purchase prices.
Selling prices also rose at the fastest pace in three months, as firms passed some of the increased costs on to customers. The manufacturing sector recorded the steepest mark-ups.
While there was a modest rebound in business expectations after a record low in March, optimism remained historically subdued. Only 5% of companies anticipated higher output in the coming year, with some pointing to expansion plans and new product offerings as reasons for cautious hope.
Overall, April’s PMI report paints a picture of a private sector regaining confidence and momentum at the start of Q2 2025. With improved demand, moderate inflation, and positive—albeit limited—future outlooks, the Kenyan economy appears to be on a gradual path to recovery.
