Kenya’s Private Sector Maintains Stability in February Amidst Caution

Kenya’s private sector exhibited steady growth in February with a PMI increase to 50.6. Growth was seen in agriculture, manufacturing, and construction, though wholesale, retail, and services faced declines. A mere 5% of firms forecast positive output in the coming year, highlighting a cautious business outlook despite the ministry’s optimistic economic growth projections.

In February, Kenya’s private sector maintained its momentum, growing at a pace comparable to the previous month, according to a recent survey. The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) revealed a slight increase to 50.6 from January’s 50.5, with values exceeding 50.0 indicating expansion. Growth in output and new business was predominantly seen in agriculture, manufacturing, and construction sectors, while wholesale, retail, and services experienced declines.

Despite the sector’s overall stability, the sentiment among businesses remains cautious. Only 5% of respondents anticipate an increase in output over the next year, with positive expectations limited to construction, wholesale, retail, and services categories. The finance ministry projects the economy to grow by 5.3% in both 2025 and 2026, accelerating from an estimated growth rate of 4.6% in the previous year.

In conclusion, while Kenya’s private sector shows steady growth this February, concerns linger regarding overall business conditions. Despite certain sectors performing well, a majority of firms retain a pessimistic outlook for the upcoming year, indicating a need for supportive measures to enhance confidence within the market. The anticipated economic growth for the next few years offers a glimmer of hope, yet challenges remain apparent.

Original Source: money.usnews.com