A report has revealed that Kenyans were most likely to have landed jobs over the past month, even though the economy was growing at a slower rate.
According to the Stanbic Purchasing Managers' Index (PMI), the number of jobs increased in August for the seventh consecutive month. Notably, this was the fastest rate of expansion since May 2024.
The headline PMI, which rose from 46.8 in July to 49.4 in August, revealed that hiring growth was recorded across all sectors of Kenya’s private sector.
The stabilisation of product demand, which allowed businesses to increase hiring expenditures, was cited by panellists as the reason for this employment improvement.
As a result, in August, Kenyan firms reduced their backlogs of work at one of the fastest rates since mid-2020.
However, this led to the rate of increase in staff costs at Kenyan businesses accelerating in August to the fastest since October 2019. Where an uplift was observed, panellists cited higher salaries due to the rising cost of living. Wage inflation was strongest among manufacturing firms.
Despite the increased workforce, August data revealed a decline in private sector activity at Kenyan businesses for the fourth month running.
Lower output was observed in the agriculture, construction, and services sectors. However, expansions in manufacturing, wholesale, and retail led to a much softer downturn in overall activity compared to July.
While firms cited ongoing challenges for themselves and clients, others were helped by stabilising sales and lower political tensions.
Meanwhile, only four per cent of companies raised their prices, whilst three per cent reported cuts. Anecdotal evidence indicated that some firms had tried to boost demand by offering discounted products and services, offsetting the pass-through of higher taxes and other cost rises.
Still, business expectations were lifted higher for the third month in a row during August. With a quarter of surveyed firms expressing optimism towards year-ahead output, overall sentiment was the strongest seen for two and a half years.
Qualitative evidence showed that new marketing strategies, branch expansions, and product diversification lay behind the positive forecasts. Manufacturing companies were the most confident out of the five monitored sectors.
