Kenya’s private sector saw diminished workforce in August this year after companies resorted to reducing their staff due to shrinking output.
The Stanbic’s Purchasing Managers' Index (PMI) report revealed that the rate of job cuts went to below normal levels for the first time this year.
However, the survey revealed that despite diminished workforce, the decrease was marginal with the agricultural sector the most affected.
“Job creation ended in August according to the seasonally adjusted Employment Index, which dropped below the 50.0 neutral threshold for the first time in 2024 so far,” the survey revealed.
“Firms signalled that recent declines in output were to blame for the cut in staffing. Although employment decreased, it did so at only a marginal pace and mostly in the agriculture sector,” it added.
Nonetheless, the general private sector activity remained stable through August as firms recovered from the anti-government protests witnessed in June and July.
The headline PMI rose from 43.1 in July to 50.6 in August, posting above the 50.0 no-change mark for the first time since May. It is worth noting that readings above 50.0 signal an improvement in business conditions while readings below 50.0 show a deterioration.
According to the survey, the reading depicted a renewed improvement in business conditions in the country's private sector. However, the pace of expansion was only marginal.
“Activity levels rose for the first time since May, with new orders also picking up, albeit marginally,” the report stated.
"Where activity increased, survey panellists reported that this was often due to the ending of political demonstrations which allowed them to resume trading and complete new work."
The renewed growth was particularly witnessed in three major sectors including the construction sector, wholesale and retail and in the services categories.
Despite the growth, most Kenyans expressed lack of confidence in business growth. According to the report, only 5 per cent of those interviewed expressed optimism.
