Salaries in the private sector showed a month-on-month improvement for the first time in seven months as firms sought to motivate staff after the deadly third wave of coronavirus infections eased, a survey suggests.
The findings of the closely watched Stanbic Bank Kenya’s Purchasing Managers Index (PMI) showed most employers in key sectors of the economy such as agriculture, manufacturing, construction and services raised their staff pay in May.
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 and rising uptake of vaccinations that stood at 974,000 on Friday sparked renewed demand for goods and services, prompting firms to raise 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.
Slashed the wages
The report, however, suggests that 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.