Firms’ payroll costs up for seventh month in a row

Kenyan firms increased compensation rates for their workers in July, extending a trend that began in December.

The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) survey released last week indicates that private firms raised workers’ pay in a bid to ramp up production.

“As has been the case since December 2017, average staff costs rose across Kenya’s private sector during July,” states the report.

“There were some reports that higher revenues allowed companies to compensate employees. That said, the rate of inflation was modest despite picking up from June’s recent low.”

Data released by Kenya National Bureau of Statistics shows increased prices of sugar, petrol, electricity and healthcare pushed the July inflation rate to a four-month high of 4.35 per cent.

The PMI shows companies raised their payroll numbers at the start of the third quarter in response to higher output requirements.

The survey states: “Where an increase in staffing levels was registered, firms commented on greater volumes of new business. That said, the rate of job creation moderated to a marginal pace.”