The level of employment opportunities surged during the month of October after months of slump, a new study has revealed. This comes as the overall infraction dropped to a 14-year low according to data from the Kenya National Bureau of Statistics (KNBS) released last month.
A study by S&P Global released on Tuesday, November 5, revealed that Kenya recorded the first employment surge since July, which allowed workforce expansion, allowing firms to clear backlogs.
“Employment levels saw a slight increase, marking the first workforce expansion since July and allowing firms to clear backlogs,” read part of the report.
The surge in employment can be attributed to a modest improvement in the business conditions of Kenya’s private sector. Despite the rise in employment opportunities, the pace of job creation was still mild.
Kenyans Queue for jobs in Kisii town
Photo
PSC
The study revealed that the Purchasing Managers’ Index (PMI) rose to 50.4 in October from 49.7 in September, indicating a marginal upturn in the health of the private sector. A PMI reading above 50.0 signals growth, while below that level indicates contraction.
“The latest PMI data reveals a cautiously optimistic outlook for the Kenyan private sector as business activity and employment levels returned to growth in October. The PMI rose to 50.4, slightly above the neutral mark, indicating a marginal upturn in operating conditions, after having declined in September. This improvement implies the challenges faced in previous months as now easing, albeit slowly, setting the stage for economic recovery,” Mulalo Madula, a senior analyst at Standard Bank observed.
“The increase in output, driven by a broad stabilization of new orders, underscores the resurgence in sales and client interest, particularly in sectors such as agriculture, construction, and wholesale & retail. However, growth was tempered by declines in manufacturing and services, highlighting the mixed performance across the sectors,” the analyst noted.
Business activity increased for the second time in three months, driven by rising sales and greater client interest, despite ongoing cash flow challenges and political uncertainty.
“Despite the slight rise in output, many firms continued to struggle with cash flow constraints, tough economic conditions, rising costs, and political uncertainty,” the survey reported.
Purchasing efforts accelerated, leading to the most significant increase in inventories since August 2023, as firms stocked up in anticipation of new customers. Input cost pressures remained mild, resulting in only a slight rise in average prices charged.
Confidence regarding future activity rose to a four-month high, with firms planning new outlets and investments in products and marketing. However, sentiment remained subdued compared to historical trends.
While input prices rose modestly, driven by higher tax payments and material costs, reduced fuel prices helped keep cost burdens lower than last year. As a result, the increase in selling prices was among the slowest in nearly four years.
Kenya Private Sector Alliance (KEPSA) stakeholders at State House, Nairobi on March 20, 2020.
PSCU
