Kenya’s private sector maintained stability in February, with the PMI rising to 50.6, indicating continued growth. Variations were evident among sectors, as agriculture, manufacturing, and construction thrived, while wholesale and retail, along with services, declined. A mere 5% of surveyed firms expect output growth in the next year, and the finance ministry predicts a rise in economic expansion in 2025 and 2026.
In February, Kenya’s private sector demonstrated stability, exhibiting growth similar to the preceding month, according to a survey by Stanbic Bank. The Purchasing Managers’ Index (PMI) increased slightly to 50.6, up from 50.5 a month prior, indicating that the private sector is maintaining a trajectory of growth, as readings above 50.0 suggest expansion in economic activity.
Noteworthy differences among sectors were highlighted, with agriculture, manufacturing, and construction contributing to increased output and new business. However, firms in the wholesale and retail sectors, as well as those in services, experienced a decline in performance. Despite the stable PMI, overall sentiments regarding business conditions appear pessimistic, with a significant majority of companies expressing concerns about future prospects.
Stanbic Bank noted that only 5% of the surveyed entities anticipate an increase in output over the next year, with positive expectations limited to three out of the five sectors monitored: construction, wholesale and retail, and services. The finance ministry projects a growth rate of 5.3% for the economy in 2025 and 2026, reflecting an increase from an estimated 4.6% growth last year.
In summary, while February’s PMI reflects consistent growth in Kenya’s private sector, divergent performance across industries reveals underlying challenges. Although sectors like agriculture and construction show promise, overall business confidence remains low, as evidenced by the limited number of firms anticipating growth. The government’s optimistic growth projections for the coming years offer a hopeful outlook amid current uncertainties.
Original Source: money.usnews.com
