Kenya’s private sector activity contracted in March for the first time since August 2025, with only the wholesale and retail sectors recording growth, a survey released on Tuesday revealed.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) fell to 47.7 in March from 50.4 in February. Readings above 50 indicate expansion, while those below 50 signal contraction.
“The slowdown in private sector activity was broadly demand-led, with many firms pointing to constrained customer spending, reduced cash circulation, and tighter household budgets,” Stanbic Bank noted. “The Middle East war also resulted in more cautious spending patterns among some firms, as well as logistics constraints to customer deliveries and higher prices for fuel and transport.”
President William Ruto said on March 30 that the government was assessing the conflict’s impact on prices and implementing measures to ensure Kenya maintains sufficient supplies.
The survey showed that output and new orders declined in most sectors, with only wholesale and retail experiencing growth. Stanbic Bank economist Christopher Legilisho highlighted that businesses expect continued constraints from geopolitical disruptions.
Despite the March contraction, Kenya’s Finance Ministry forecasts economic growth of 5.3% in 2026, up from 5.0% in 2025 and 4.7% in 2024, reflecting resilience amid global uncertainties.
