Kenya’s private sector recorded its strongest hiring momentum in more than a year in November as firms rushed to expand capacity amid a sharp rebound in demand, according to the latest Stanbic Bank Kenya Purchasing Managers’ Index.
- •The headline PMI rose to 55.0 from 52.5 in October, the highest reading since October 2020, marking the fastest improvement in business conditions in over five years.
- •The surge was anchored by a rebound in new orders, which grew at the quickest pace since late 2020.
- •Employment increased for the tenth straight month, with the latest rise the second-fastest since August 2023, the survey shows.
Christopher Legilisho, economist at Standard Bank, said the November reading “points to steady and improving business conditions in the private sector,” adding that government stimulus over the past year is “now showing up in the real economy.”
Companies across services, retail, manufacturing and construction reported bringing on new staff to manage higher workloads as customer traffic picked up.
Businesses said they expanded payrolls to prevent bottlenecks as sales rose and inventories grew. “Purchasing activity and stocks of inventories strengthened as the effects of more enthusiastic consumer spending impelled firms to ramp up to meet expected demand,” Legilisho said.
Hiring was particularly strong among firms that had cut back earlier in the year due to cost pressures. The easing of inflation helped create room to add workers, with input price growth slowing to its weakest level in 18 months.
Inflation expectations are also stabilising. “Kenyan businesses reported softer increases in input prices, purchase prices and output prices, while wages costs were unchanged,” Legilisho noted. That has reduced pressure on margins and given firms more confidence to expand staff.
Even with the improved demand backdrop, business confidence about output over the next year dipped for a third month. Firms cited higher taxes, political uncertainty tied to fiscal reforms and cost risks linked to imported inputs.
