60 percent of local businesses to cut jobs in 2020


60 percent of local businesses to cut jobs in 2020
A woman looks at signs at a store closed due to COVID-19 in Niles, Ill., Wednesday, May 13, 2020. (AP Photo/Nam Y. Huh)

In Summary

  • According to the CBK-Monetary Policy Committee (MPC) Survey conducted in May, 46 percent of non-bank private sector institutions indicated their employee stock would decrease in the year while another 14 percent of respondents indicated a strong decrease in jobs.
  • In comparison, local firms harboured expectations of growing their employee base with January’s MPC survey indicating 61.1 percent of respondents expected employment levels to remain static while another 18.6 percent of firms saw jobs increasing.
  • The expected staff layoffs coincide with weakened growth expectations for the year from the widespread economic disruption arising from measures to contain the Covid-19 pandemic including restriction of movement and night time curfews.

A majority 60 percent of local firms will cut jobs this year owing to the hardships brought forward by the COVID-19 pandemic.

According to the Central Bank of Kenya (CBK) Monetary Policy Committee (MPC) Survey conducted in May, 46 percent of non-bank private sector institutions indicated their employee stock would decrease in the year while another 14 percent of respondents indicated a strong decrease in jobs.

“Respondents from the non-bank private sector expected the employment levels within their establishments to decrease following the low business levels and revenue generation, which were unable to sustain the current numbers of employees, in addition to the closures and uncertainties and supply chain interruptions brought about by the pandemic,” notes the survey.

In comparison, local firms harboured expectations of growing their employee base with January’s MPC survey indicating 61.1 percent of respondents expected employment levels to remain static while another 18.6 percent of firms saw jobs increasing with 2.7 percent of the entities indicating a strong increase.

The expected staff layoffs coincide with weakened growth expectations for the year from the widespread economic disruption arising from measures to contain the COVID-19 pandemic including restriction of movement and night time curfews.

Expectations on growth for the year by non-bank private firms fell to 2.9 percent in May from a higher 5.5 percent in January with banks holding a greater pessimism for growth at 1.6 percent.

Optimism on economic prospects have likewise turned negative with 55 percent of private sector firms indicating pessimism in May in comparison to a 68 percent optimistic feel to prospects at the start of the year.

The enterprises have further ranked the impact of the pandemic as severe even as the majority of banks assess the impact as moderate at 64.1 percent.

On the contrary, local firms have held their expectations on inflation and the direction of the Kenyan shilling. The entities see inflation sticking to the target range of 2.5 to 7.5 percent.

Further, local business see a strengthened local currency unit but for the bias of a slight weakening.

For Citizen TV updates
Join @citizentvke Telegram channel



Video Of The Day: | BULLDOZERS FOR SANITIZERS | Families remain in the cold after evictions from Kariobangi sewage estate

Avatar
Story By Kepha Muiruri
More by this author