CFC predicts more jobs to be created in 2016

NAIROBI, KENYA: Kenya’s private sector remained on an upward curve at the start of 2016, as growth accelerated for the third straight month.

Latest purchasing managers’ index data released by CfC Stanbic Bank indicates that Business conditions improved at the fastest pace in over a year, driven by marked expansions in output, new orders and employment. 

“2016 has begun on a solid footing, showing a similar trend to that seen towards the end of last year. The CfC Stanbic data accelerated to a 13-month high boosted by higher output, new orders and employment,” said Jibran Qureishi, Regional Economist East Africa at CfC Stanbic Bank. 

Mr Qureishi also noted that job creation will probably continue to remain robust in the coming months considering that backlogs of work rose at the fastest rate in the series history. 

Reflective of the overall trend, output rose at the steepest rate in over a year during January. Reports of improving client demand were reinforced by survey data at the beginning of 2016. In addition, growth of new business accelerated to a nine-month high, helped by a solid expansion in new export work. 

Similarly, the rate of job creation at Kenyan private sector firms was the most marked since May last year. Survey participants indicated that hiring was generally a result of rising workloads, though this also placed pressure on operating capacity. Outstanding business was accumulated at the sharpest pace in the survey’s 25-month history. 

Meanwhile, total input costs rose more slowly in January. The respective index was at a ten-month low, reflective of a relatively muted increase in purchase prices. Notably, reports of currency weakness versus the US dollar were much less frequent than in previous months.  

Weaker cost pressures benefitted consumers to some extent, as charges increased only modestly. Some respondents offered discounts in an effort to secure new business, while others continued to pass through higher input prices.