Companies raise workers’ pay on easing infections

Covid vaccination

Coronavirus insurance claims have dropped nearly 90 per cent in the first quarter of 2022. PHOTO | AFP

Salaries in Kenya’s private sector showed a month-on-month improvement for the first time in seven months as firms sought to motivate workers after the deadly third wave of coronavirus infections eased, a closely-watched survey suggests.

A majority of employers in key sectors of the economy such as agriculture, manufacturing, construction and services indicated they increased pay in May, according to findings of Stanbic Bank Kenya’s #ticker:SBIC Purchasing Managers Index (PMI).

This signals renewed optimism in economic recovery after authorities eased travel restriction and partial trade shutdowns, imposed mid-March, in the Nairobi metropolis and Nakuru at the start of May.

The tighter shutdown measures in Nairobi, Nakuru, Kiambu, Machakos, and Kajiado were relaxed after infections dropped from a monthly peak of 28,085 persons in March to 25,260 in April and further down to 11,417 in May, according to Ministry of Health data.

The falling infections, coupled with the rising uptake of vaccinations which stood at 974,000 persons on Friday, sparked renewed demand for goods and services, prompting firms to increase output and hiring.

“For the first time since October 2020, the seasonally adjusted Staff Costs Index rose above the 50.0 neutral value in May, signalling a rise in private-sector salaries. Although marginal, the rate of inflation was the joint-quickest [with October 2020] for 19 months,” analysts at Stanbic Bank and UK researcher, IHS Markit, wrote in the PMI report for May.

The report, however, suggests companies that had suffered a drop in sales slashed the wages for workers compared with April to keep them on the payroll.

Overall, activity in the private sector recovered from April’s drop —the first since June 2020— signalling a modest improvement in operating conditions.

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Note: The results are not exact but very close to the actual.