The Markit Stanbic Bank Kenya Purchasing Managers' Index (PMI) rose to 53.7 in December from 53.0 in the previous month. The 50.0 mark separates growth from a contraction in activity.
"Both domestic and export demand expanded rapidly on account of fewer public health restrictions locally and around the world," said Kuria Kamau, fixed income and currency strategist at Stanbic Bank.
Like other economies, Kenya was hurt by the COVID-19 crisis as restrictions imposed to fight the pandemic reduced revenues and stifled growth.
The statistics office said on Friday that the economy rebounded in the third quarter following the easing of measures aimed at curbing COVID-19's spread.
The recovery started in 2021, helped by the scrapping in October of a night-time curfew in place since March 2020, but its pace could be slowed by a shortage of COVID-19 vaccines and the emergence of any new variants.
The government started enforcing in December a requirement to show proof of vaccination to access public places, government services and transport.
The PMI survey showed business confidence for 2022 dropped in December to its weakest since the survey started in January 2014.
"The 12-month outlook as reported by firms fell to the lowest level on record with most firms expecting business conditions to remain largely the same in 2022," Kamau said.
The finance ministry forecasts the economy will have expanded 5.9% in 2021 after contracting 0.3% a year earlier.
(Reporting by George Obulutsa; Editing by Catherine Evans)
