The Markit Stanbic Bank Kenya Purchasing Managers' Index (PMI) dropped to 41.5 from 50.6 in March, well below the 50.0 mark that separates growth from contraction. The reading was the lowest for the PMI since May last year.
Kenyan President Uhuru Kenyatta stopped movement into and out of five counties, including the capital Nairobi, at the end of March to halt a surge in coronavirus cases and deaths. He also imposed other measures like a ban on sales of alcohol.
"The increased restrictions resulted in lower demand which forced firms to cut back on output and spending on inputs," said Stanbic Bank fixed income and currency strategist Kuria Kamau.
Kenyatta relaxed some of the measures over the weekend after infections fell.
Survey respondents said output slid in April while new business declined sharply, leading companies to lay off staff.
(Reporting by Duncan Miriri; Editing by Catherine Evans)
