Kenyans were more likely to get jobs in August even though the economy continued to grow at a slower pace, a new report shows.
The Stanbic Bank Purchasing Managers’ Index (PMI) revealed that employment rose for the seventh month in a row, marking the fastest growth in hiring since May 2024. The headline PMI improved from 46.8 in July to 49.4 in August, signalling stronger activity in the private sector.
According to the report, hiring increased across all sectors as businesses responded to a stabilisation in demand, allowing them to spend more on new staff. This helped firms cut backlogs of work at one of the fastest rates since mid-2020.
However, the rise in employment also pushed up staff costs. The report noted that salaries increased at the fastest pace since October 2019, with companies citing the high cost of living. Wage growth was strongest in the manufacturing sector.
Despite more hiring, private sector activity declined for the fourth month in a row. Output fell in agriculture, construction, and services, but gains in manufacturing, wholesale, and retail softened the slowdown compared to July.
Some firms tried to attract customers by cutting or discounting prices, even as taxes and other costs rose. Only 4 per cent of companies raised their prices in August, while 3 per cent reported cuts.
Business confidence, however, showed a positive outlook. Optimism about future output rose for the third month in a row, with sentiment at its highest level in two and a half years. A quarter of the firms surveyed said they expect better performance ahead, driven by new marketing strategies, branch expansions, and product diversification.
Manufacturing firms were the most confident among the five sectors surveyed.
