Private sector signal slower recruitment in 2026 - CBK survey
The survey targeted chief executives and senior officers from at least 400 private sector firms, including commercial banks, microfinance institutions and.
Youths queue for job interviews in Nairobi. (Photo: File)
Private sector firms in Kenya have lowered their hiring expectations for 2026 compared to 2025, according to the latest Central Bank of Kenya (CBK) Market Perceptions Survey.
The May 2026 survey shows that businesses have scaled back recruitment plans compared to expectations recorded in March, pointing to a more cautious labour market outlook for the year ahead.
“The May survey results indicate that firms have lowered their expectations on hiring compared to the survey conducted in March,” reads the report.
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It attributes the weaker hiring outlook to increased adoption of digitisation and resource optimisation strategies, which are enabling firms to maintain productivity with fewer new hires.
It also highlights a structural shift in employment practices, with companies increasingly converting contract staff into permanent roles in a bid to strengthen retention and improve workforce stability.
The survey targeted chief executives and senior officers from at least 400 private sector firms, including commercial banks, microfinance institutions and non-bank enterprises such as hotels.
Beyond employment trends, respondents expect moderate economic activity in the coming months, supported by agriculture, sectoral recovery and easing borrowing costs, although inflationary pressures, high energy and fuel costs, and geopolitical tensions continue to weigh on demand.
Despite the cautious hiring outlook, the report indicates that private sector credit growth is expected to strengthen in 2026, driven by lower interest rates, improved business confidence and increased lending to key sectors including MSMEs, manufacturing, construction, trade and agriculture.
Respondents further noted that elevated production costs and weaker consumer spending remain key constraints on business expansion, with many firms citing inflationary pressures as a major risk to sustained recovery across sectors.
However, improved digital lending channels and targeted financing strategies for SMEs are expected to partially offset these challenges by improving access to credit and supporting business continuity and expansion efforts.