Firms cut new hiring on higher staff costs, weak demand
The softer labour market comes after the headline PMI fell to 51.9 in January from 53.7 in December. Readings above 50 indicate an improvement in business conditions, while those below 50 signal a contraction. Kenya breaking news | Kenya news today |..
✨ Key Highlights
Kenyan private sector companies scaled back new hiring in January, attributing the slowdown to rising staff expenses, increased input prices, and subdued demand.
- The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) recorded a drop to 51.9 in January from 53.7 in December, indicating a slower but continued expansion in business activity.
- Economist at Standard Bank, Christopher Legilisho, linked the higher input costs and staff expenses primarily to increased taxes and rising technology costs.
- Despite these challenges, firms were able to reduce their backlogs of work, with some citing sufficient capacity and a slowdown in new order growth.
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AGOA Extension Welcomed Amidst Kenyan Hiring Slowdown, New Logistics Venture, and Livestock Market Expansion - February 2026
Kenyan business lobby groups, including KAM and KEPSA, have welcomed the extension of the African Growth and Opportunity Act (AGOA) to December 31, 2026, which is expected to protect jobs and enhance U.S. market access. Despite this, Kenyan private sector companies scaled back new hiring in January, attributing the slowdown to rising staff expenses and subdued demand. In a sign of new investment, Yusen Logistics and Africa Global Logistics (AGL) launched a new joint venture, Yusen Africa (East Africa) Limited, headquartered in Nairobi. Additionally, Kenya is expanding its livestock and livestock product markets through the De-risking, Inclusion and Value Enhancement (DRIVE) Project to boost jobs and exports.
