Kenya's Private Sector Expansion Slows in January, PMI Dips to 51.9

Kenya's private sector picked up growth momentum at the start of 2026 but not as fast as in December, based on data from the Stanbic Bank Kenya Purchasing Managers' Index (PMI). The January reading slipped to 51.9 from 53.7, signalling ongoing expansion yet with a noticeable deceleration.

Anything above the key 50 mark on the PMI indicates growth, while anything below points to contraction. This drop suggests the private sector isn't exactly stalling, but the engines driving growth have lost some steam.

The slowdown is largely driven by the construction and wholesale & retail segments, where demand actually dipped. Manufacturing bucks the trend, reporting some of the strongest sales growth among the sectors surveyed. This contrast highlights uneven momentum across Kenya's economy.

The mixed performance of these sectors could hint at shifting economic dynamics, with consumer-related activities cooling off despite persistent strength in production. Supply chains and order backlogs remain stretched in manufacturing, but new orders showed some moderation too.

Kenya's Finance Ministry recently forecast the country's economic growth to nudge up to 5.3% in 2025 and 2026, from 4.7% last year. This optimism gets some support from the World Bank, which revised its growth prediction for Kenya upwards to 4.9% for 2026, a slight increase from its earlier estimate of 4.5%.

These projections suggest underlying confidence in the country's economic resilience, even as short-term indicators like the PMI show a temporary slackening of activity.

This subtle dip in private sector expansion could be a natural pause in a broader cycle of recovery, or reflective of sector-specific challenges needing more attention. Either way, it draws attention to sectors that might face headwinds ahead.

As the January snapshot provides fresh data on Kenya's business climate, the divergence between manufacturing growth and retail plus construction declines paints a picture ripe for further watchfulness, especially in how these segments adjust in coming months.