Kenyan firms report highest workforce expansion in two years – Stanbic

NAIROBI, Kenya, Dec 3 – Kenya’s private sector reported the highest rate of workforce expansion in two years, Markit Stanbic Bank Kenya Purchasing Managers’ index has reported.

In its monthly survey, Stanbic noted that over the same period, business activity expanded at the highest point in ten months after the PMI index rose to 53.0 from 51.4.

The survey attributed the improvement to the lifting of the COVID-19 containment measures which in turn led to an increase in domestic demand especially in the hotel and transport sectors which had been hard hit by the restriction measures.

Trade, services, and construction sectors reported the highest demand while firms in the agriculture and manufacturing sectors witnessed a decline in output.

“New orders rose steeply and at the fastest rate since May, which businesses often related to an increase in demand from the lifting of night-time curfew measures. This led to a solid upturn in an activity that was also the strongest seen for six months,” the survey revealed.

The report attributed the rise in workforce expansion to stronger rises in output and new orders which led to higher workloads.

“Meanwhile, private-sector employment was reportedly boosted by higher sales, with latest data signaling the quickest rise in job numbers for exactly two years. The increase in staff capacity allowed firms to reduce their backlogs for the first time since May,” the report added.

Kuria Kamau, Fixed Income and Currency Strategist noted that despite the improved business activity, output forecasts remained subdued in the wake of COVID-19 Omicron variant discovery which poses threat to economies globally.

Only a quarter of the 400 private sector companies polled said they expected activity to rise over the coming year.

“Forecasts remained subdued in November, with just over a quarter of firms expecting activity to rise over the coming year, the 1-year outlook as reported by firms continues to remain near historical lows despite a slight improvement in November,” Kuria said.