Private sector activity in Kenya contracted in March for the first time since August 2025, as weak consumer demand and disruptions linked to the Middle East conflict weighed on businesses.
Data from Stanbic Bank Kenya shows the Purchasing Managers’ Index (PMI) fell to 47.7 in March, down from 50.4 in February, signalling a deterioration in business conditions.
Firms reported lower output and fewer new orders, citing reduced household spending power, rising fuel and transport costs, and ongoing logistical challenges affecting supply chains.
Input costs rose at their fastest pace in over two years, driven by higher taxes, fuel prices and shipping costs, while companies struggled to pass these increases on due to weak demand.
Despite the slowdown, some businesses remain cautiously optimistic, with a number expecting growth over the next year through expansion plans, marketing efforts and investment in capacity.