, NAIROBI, Kenya, Jul 3 – Kenya’s private sector recorded a growth in employment rates in June which accelerated to reach the highest level seen since December 2016, according to Stanbic Bank’s Purchasing Managers’ Index.
The index registered a score of 54.3 in June compared to 51.3 in May, to signal a steep improvement in operating conditions for Kenyan private sector businesses.
Firms were reportedly encouraged by the strong increase in demand for their products and services, leading to a greater number of hires.
The latest rise followed a modest job creation rate in May and a slight decline in the month of April.
Firms also enjoyed a sharp increase in output and new orders, driven by demand from both domestic and external markets. They also saw sales grow at the fastest rate in the year so far.
“The rate of increase for output was markedly faster than in May, with only January posting stronger growth in the year-to-date. Some businesses related the rise in output to improved cash flow during the month, while others highlighted the impact of marketing activity on sales volumes,” reads the index.
Additionally, firms increased their output prices at a moderate rate in June, as the pace of inflation quickened slightly from May. This also marked the fastest rise in charges in the year to date.
“Companies that marked up their prices often linked this to the steep uptick in purchasing costs, with some highlighting the need to sustain profit levels.”
Overall, business expectations were at a record high in June, as over 92 percent of companies gave a positive prediction for output over the coming 12 months.
According to the survey, optimism was often driven by plans to open new branches and expand into other markets.
“Some firms also mentioned that the recent government spending announcement should stimulate business activity throughout the year.”