The April 2024 Stanbic Bank Kenya Purchasing Managers’ Index (PMI) has indicated that Kenyan businesses in the private sector increased their workforces by hiring more employees.
According to the report, the private players have continued employing new staff to boost their sales, especially in the construction sector.
Additionally, the report indicated that the managers of the private companies recorded an increase in employment because of their huge workloads.
Levels of outstanding work among Kenyan firms ticked higher at the start of the second quarter. April and March marked the first back-to-back growth in eight months, although the rate of expansion remained weak.
“Kenyan businesses increased their workforces for the fourth consecutive month in April. Recruitment was linked to both current workloads and efforts to boost sales,” indicated the report.
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Effects of Heavy Rainfall on Jobs in Private Sector
At the same time, Stanbic Bank Kenya Purchasing Managers’ Index increased to 50.1 in April, from 49.7 in March indicating growth in the private sector for the month of April.
Christopher Legilisho, an economist at Stanbic Bank explained that it was as a result in the decrease of pressure on prices of commodities across most sectors surveyed except the construction and agriculture sector.
On the other hand, the report, written following the feedback received from 400 corporate managers also indicated that most key sectors such as agriculture, manufacturing, wholesale and retail, services and mining witnessed a modest increase in compensation for employees.
“The rate of wage inflation was modest overall and below the long-run trend, but the strongest in eight months. Slightly higher staff costs were seen in most sectors, the exception being construction,” detailed the report.
However, there are concerns that the second quarter performance could be affected by the effects of heavy rainfall.
“We share these concerns and worry that growth will slow in Q2:24 (second quarter 2024) because of the widespread devastation and disruptions caused by the heavy rain,” Christopher Legilisho, an economist at Stanbic Bank, stated.
Employment opportunities rose highest in construction sectors in April, according to the PMI, indicating contractors were hiring at lower wages given that the sector’s overall staff expenses dropped.
The rate of job creation was highest in February when the rate of hiring hit a 13-month high, it slowed down in March before picking up again in April.
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CBK CEOs Survey
According to the March 2024 CEOs Survey by the Central Bank of Kenya (CBK), expectations for growth in companies, industries, and businesses worldwide over the next year had improved because the prices of commodities were not increasing as quickly, and there were predictions of good weather.
However, the survey found that the businesses were struggling to grow because they continued to face challenges like higher expenses, more taxes, the state of the economy, and people having less money to spend.
“The Survey assessed the CEOs optimism in the growth prospects for their companies, sectors, and the Kenyan and global economies over the next 12 months. Business optimism for company, sector, Kenyan, and global growth prospects over the next 12 months improved.
“Good performance in the agriculture sector is expected to support manufacturing sector through the agro processing linkages. Firms expect increased demand to be met through utilization of existing idle capacity and continued leveraging on technology,” the report stated.
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