Kenya’s Employment Pace Hits 6-Month Low on Struggling Retail

Nairobi — The pace of Kenya’s employment rate eased to a 6-month low in January on struggling retail and wholesale sector which reported weaker sales, the Stanbic Kenya Purchasing Managing Index(PMI) survey has revealed

The monthly poll, conducted amongst around 400 private sector companies, however, reported improved recovery in the employment index for the ninth consecutive month as firms continued to add their workforce, a trend which began in May 2021.

“Kenyan firms continued to add to their workforce numbers at the start of the year. The overall upturn in staffing levels eased to a six-month low, however, as several firms mentioned that weaker sales,” the survey added.

Despite growth in employment numbers, the majority of the firms indicated that reduced demand forced them to lower staff salaries in January.

“Payroll costs fell for the first time in nine months, although the pace of decline was only marginal,” the survey indicated.

Overall, Kenya’s Purchasing Managers Index (PMI) fell to 47.6 in January from 53.7 in December on declined Private sector activity in the country as Covid-19 and political activity continued to hamper recovery.

Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank said client spending was negatively affected by rising inflation and a resurgence in Covid-19 due to the Omicron variant.

“Economic activity started 2022 on a subdued note as evidenced by the Stanbic PMI reading that fell to the lowest level in 9 months. While export demand grew marginally, domestic demand fell significantly,” Kamau said

According to Stanbic, lower client spending drove a marked decline in sales, in part related to strong price pressures and a recent surge in Covid-19 cases from the Omicron variant.