Casual job hires rise in December on orders growth

Kenyan firms hired more casual workers in December compared with a month earlier to meet increased orders for products, a monthly survey shows.

Markit Stanbic Bank Kenya Purchasing Managers Index (PMI), which is based on interviews with corporate managers, largely in manufacturing and services sectors, shows most firms beefed up their production capacity in line with increased demand during the festive month.

Companies surveyed also said the rise in prices of goods and services was weakest in five months, while output charges rose marginally, prompting a slight increase in consumer prices to offset the overheads.

“Staffing levels recorded a modest rise during December. Employment growth was driven by an increase in casual workers in line with the rise in new orders.

"Alongside this, supply chains maintained a strong efficiency, with delivery times decreasing at a sharp rate,” Stanbic Kenya economist for East Africa Jibran Qureishi said in a statement on Friday.

“Where costs did rise, firms pointed to higher transportation and food costs, as well as a sharper increase in salaries. Staff costs rose as firms reported dividing out profits earned from the recent sales growth.”

Marginal rise

The headline PMI Index – the measure of private sector activity such as output, new orders, employment and supplies delivery times – rose marginally to 53.6 in December from 53.1 a month earlier.

A print above 50 denotes growth in overall business activity compared to the previous month, while a reading below that mark points to a contraction in activity undertaken by firms.

“The Stanbic PMI closed the year strongly, recording the highest average since 2014. We believe that gross domestic product growth remains on track to test 6.0 percent year-on-year in 2018 and furthermore the good weather conditions in …(quarter four) will have underpinned the agrarian sector as well,” Mr Qureishi said.

“Moreover, firms scrambled to clear backlogs of stock in December which subsequently boosted output, while surprisingly costs remained steady for firms during the festive season as well.”

Companies further reported increased export orders, indicating that firms experienced an influx of both domestic and overseas demand.

Kenya’s economic activities last year recovered from a five-year low in 2017 spurred by improved weather and a better investment environment following a March 9 truce between President Uhuru Kenyatta and opposition chief Raila Odinga – popularly known as the “Hand Shake”.