Kenyan companies expect to absorb additional workforce this year on account of improved businesses activity, the central bank has said.

Market Perception Survey conducted by the Central Bank of Kenya (CBK) indicates that banks will lead in the creation of jobs followed by transport and services, agriculture and manufacturing.

According to the survey, 95pc of respondents in the banking sector expect an increase in the level of employment this year, while 75pc, 67pc and 45pc of respondents in transport and services, agriculture and manufacturing expected higher jobs uptake in the year.

Source/CBK

CBK says bank respondents expected employment to be supported by planned business growth, expansions and business remodelling and growth in business volumes and expected stability in the country.

“However, banks expected to continue with digital adoption strategies, increased automation of processes and cost cutting measures which could result in minimal reduction of operational resources,” said CBK.

“Non-bank respondents expected employment to be largely supported by improved business, but expected seasonal factors, e.g., end of festive season demand for casual workers by hotels, and automation, including optimization of processes and enhanced technology to help reduce costs, but lead to some merged roles and likely redundancies.”

Kenya’s private sector activity has been growing in for the last three consecutive months according to Standard Bank Purchasing Managers’ Index.

PMI jumped to 52 in January backed by increase demand and higher sales by firms indicating the continued economic recovery after the conclusion of the August elections last year.

“Kenya's private sector activity held up well into January, with new business rising for the fifth consecutive month, spurring higher output and, consequently, employment growth. Notably, the influx of new business was the strongest in eleven months, reflecting improved marketing efforts,” said Mulalo Madula, Economist at Standard Bank.

Nonetheless, 62pc of the respondents expect upward pressure on inflation to come from high cost of energy despite declining international oil prices.

The respondents expected high fuel, transport and electricity costs due to the removal of Government subsidy and increased cost of production and subsequently higher prices of consumer goods and services.