The Stanbic Bank Kenya Purchasing Managers Index (PMI) released in January showed improved business.
Companies in Kenya will prioritise diversification and efficiency projects over the next three years to unlock a new growth phase, a new survey says.
A study of over 1,000 private sector chief executives revealed that a majority, 19 per cent, will go for expansion of new products and services as a business strategy to reduce risk and grow revenue.
An estimated 19 per cent of the executives also revealed that they would focus on improving efficiency in operations to limit cost and wastage amid economic uncertainty.
“The survey sought to find the key strategic priority areas for firms in the next three years. A large proportion of the respondents highlighted diversification of operations and product offerings, improvement in operational efficiency, and cost optimisation as the top strategic priorities for their organisation in the near term,” said the Central Bank of Kenya findings.
The financial sector regulator conducted the survey between January 12 and 23, 2026. It sought CEOs’ views on their levels of confidence or optimism in the growth prospects for their companies and sectors, as well as the growth outlook for the Kenyan and global economies over the next 12 months.
Wholesale and retail trade
The respondents were from various sectors of the economy including tourism, hotels, and restaurants (17 per cent), ICT and telecommunications (14 per cent), professional services (13 per cent), financial services (12 per cent), manufacturing (11 per cent), agriculture (nine per cent), healthcare and pharmaceuticals (nine per cent), wholesale and retail trade (five per cent), transport and storage (four per cent), and real estate three per cent).
Mining and energy, education, building and construction, media, and security sectors accounted for one per cent or less of the respondents.
Many of the executives expect higher demand orders and sales growth during the first quarter of 2026, while a larger share expects production volumes to remain stable. “The anticipated increase in demand and growth in sales during the quarter is supported by firms’ aggressive marketing strategies, including discounts, promotional offers, and intensive campaigns aimed at clearing carry-over stock from the festive season,” CBK said in its survey report.
However, compared to the November 2025 survey, the balance of opinion shows a decline in expected sales growth, largely reflecting seasonal factors.
“In addition, the balance of opinion shows expectations of stability in demand orders and production volumes relative to the previous quarter, owing to post-festive season moderation in activity. Sales and purchase prices are generally expected to remain relatively stable during the quarter,” CBK said.
Protect profit margins
Nonetheless, some respondents reported the likelihood of higher sales prices due to upward price adjustments as firms seek to offset rising operating costs and protect profit margins.
The Stanbic Bank Kenya Purchasing Managers Index (PMI) released in January showed improved business. The headline PMI eased slightly to 53.7 from November’s four-year high of 55.0, but remained firmly above the 50-point mark signalling continued expansion in private sector activity.
A reading above 50 signifies an improvement in private sector activity compared to the previous month.
According to the PMI, a fifth of surveyed firms expressed confidence for increased output this year, on the back of a raft of factors including business diversification plans, new marketing avenues, improved skills bases, product rebrands, and investment growth.
According to the PMI, a fifth of surveyed firms expressed confidence for increased output this year, on the back of a raft of factors including business diversification plans, new marketing avenues, improved skills bases, product rebrands, and investment growth.
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