Why Kenyan Employers Are Quietly Hiring Across Private Sectors

The Employment Index has remained above 50 for ten consecutive months, indicating consistent job growth across all five monitored sectors by Stanbic Bank.

According to the November Stanbic Bank Kenya Purchasing Managers’ Index (PMI) report, the employment rate was high due to improved economic conditions.

The report showed that the pace of job creation was the second-fastest in over two years.

“Employment levels ticked up at one of the fastest rates this year due to the improving economic conditions,” read the report.

“Employment increased for the tenth consecutive month, with the latest growth being the second fastest since August 2023.”

From small businesses in Nairobi to larger firms in Mombasa and Kisumu, employers are cautiously yet confidently expanding their teams, reflecting renewed optimism in the private sector.

The Stanbic Bank Kenya PMI was compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 private sector companies

Stanbic Bank PMI Report Reveals Hiring Trends in Private Sectors

According to the report, Kenyan firms experienced a rise in business activity and remain optimistic about prospects over the next 12 months.

However, business confidence eased, with the Future Output Index declining for the third consecutive month.

The report noted that positive expectations were often driven by planned marketing campaigns, expansion initiatives, and efforts to diversify products and services, according to respondents.

Output and New Orders Surge Across the Kenyan Private Sector

Output activity across Kenya’s private sector accelerated sharply in November, with the seasonally adjusted Output Index reaching its highest level since October 2020.

The rise in business activity was among the steepest recorded in the survey’s history, with survey panellists attributing the growth to stronger market demand.

“Activity growth across the Kenyan private sector accelerated markedly in November, indicated by the seasonally adjusted Output Index climbing to its highest level since October 2020,” read part of the report.

New business volumes also expanded for the third consecutive month, with the pace of growth hitting its fastest rate in just over five years.

All sub-sectors recorded gains, driven by factors such as improved client purchasing power, successful marketing strategies, increased referrals, and the launch of new products.

Also Read: Kenya’s Private Sector Records First Fall in 7 Months – PMI Report

Kenya PMI Reaches Its Highest Level in Over Five Years

Additionally, the PMI pointed to a strengthening of growth in the private sector economy in November, as business activity and new work both expanded at the sharpest rates in over five years.

In the report, firms experienced improving customer sales, helped by relatively soft inflationary pressures, as well as successful new product launches and marketing campaigns.

 Purchases of inputs rose, while employment growth quickened from October.

“The headline figure derived from the survey is the Purchasing Managers’ Index (PMI). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration,” read part of the report.

Also Read: Kenya’s Private Sector Nears Recovery as Business Confidence Hits 30-Month High

At 55.0 in November, the headline PMI was up strongly from 52.5 in October and at its highest since October 2020.

The upturn was mainly driven by a much sharper increase in sales volumes compared to the previous survey period.

Surveyed companies frequently noted that improved customer purchasing power contributed to higher sales volumes.

“This trend was partly linked to a moderation in inflationary pressures, as evidenced by the survey data. In fact, selling charges increased only slightly and at the slowest rate since August, while input costs rose to the smallest extent in 18 months,” read part of the report.

Business activity expanded at a sharper rate over the course of November as the pace of growth was the fastest seen in just over five years.

Likewise, firms greatly increased their purchases of inputs in November to meet client demand and shore up inventories.

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