KAM: Manufacturers plan to reduce size of full time employees

NAIROBI, KENYA: A number of employers in the manufacturing sector are planning to reduce the size of full-time employees.

According to the Kenya Manufacturing Association barometer for the first quarter of this year, 33 per cent of manufacturers plan to reduce the number of full-time employees over the next six months.

The survey also indicates that 24 per cent of industrial manufacturers plans to add employees to their workforce over the next 6 months. However, the majority (43 per cent) plan to retain the status quo.

When asked what type of employees they plan to add in their workforce team over the next six months, majority said they would opt for blue-collar workers (semi-skilled or unskilled workers) at 63 per cent, blue-collar workers (skilled/specialized workers) at 16 per cent and professionals (technology/engineering) at 16 per cent.

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In the first quarter of the year, the majority (47 per cent) of manufacturers operated at about half capacity while 33 per cent reported being operating at 75 per cent of installed capacity. Only 20 per cent of surveyed manufacturers were operating at near full capacity during the quarter under review.

The industrial manufacturers, however, reported a positive outlook on revenue growth rate over the next 6months. 48 per cent expect positive revenue growth for their own companies, with 19 per cent forecasting a negative growth whereas 33 per cent forecast zero growth.

According to the survey barriers to the growth in the manufacturing sector over the next six months include the cost of raw materials, pressure from increased wages, decreasing profitability, taxation policies, unhealthy competition from cheap imports and regulatory pressure.

Other challenges reported as a threat to businesses include frequent power fluctuations, delays in vat refunds by KRA and clearance delays at the port.

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UnemploymentKenya Association of Manufacturers