Job prospects for Gen Z dim as Kenyan economy slows in Q2

Kenya's economic growth slowed down in the second quarter of 2024, raising concerns about the country's ability to create jobs and meet the rising expectations of its restive youthful population, popularly known as Gen Z. Key sectors, often seen as bellwethers for the economy, have contracted, official government data published yesterday, showed signalling potential job losses and a hurting economy. According to the Kenya National Bureau of Statistics (KNBS), the country's real GDP expanded by 4.6 per cent in the second quarter of this year compared to a growth of 5.6 per cent in the corresponding quarter of 2023. While still in positive territory, the slowdown is a significant departure from the robust growth witnessed in recent years. One of the primary drivers of the economic slowdown, data shows, has been the contraction in the construction sector, which is often seen as a barometer of overall economic health. For years, Kenya's booming construction industry had been a symbol of the country's robust economic growth, with high-rise buildings springing up in city suburbs and across the country. This construction boom had earned Kenya the moniker of a "big construction site", underscoring the sector's importance as a barometer of the nation's economic health. However, according to the latest official data, the construction sector contracted by 2.9 per cent during the quarter under review, compared to a growth of 2.7 per cent in the second quarter of 2023. Indicators such as cement consumption, bitumen imports, and iron and steel imports all declined, suggesting a slowdown in construction activity. The drop in cement usage, a bellwether for construction activity and economic growth, comes as President William Ruto's government has placed affordable housing as a key plank of its policy agenda. President Ruto has placed affordable housing as a key policy priority, aiming to build hundreds of thousands of new homes across the country. This ambitious agenda is not only meant to address Kenya's chronic shortage of decent and affordable accommodation but also act as a driver of job creation in the construction sector, according to him. The slowdown in the construction industry now raises questions about the government's ability to meet its ambitious affordable housing targets, which are seen as crucial for addressing the country's chronic shortage of decent and affordable homes, say experts. The mining and quarrying sector also experienced a contraction, declining by 2.7 per cent during the review period. This is a setback for the government's efforts to diversify the economy and reduce its reliance on agriculture, analysts said. While some sectors, such as agriculture, forestry, and fishing, as well as wholesale and retail, continued to show growth, their contribution to the overall economy was not enough to offset the declines in other sectors. Agriculture, forestry, and fishing grew by 4.8 per cent, although this was down from 7.8 per cent in the same quarter last year. The accommodation and food services sector mainly comprised of hotels and entertainment spots also slowed down to 26.6 per cent from 42.8 per cent in 2023 signalling the disposable incomes of Kenyans who frequent the hospitality outlets have shrunk. Consumers across the country have been confronting shrinking payslips and incomes amid a slew of new taxes and a cost of living crisis. The data showed the Financial and Insurance Activities sector expanded by 5.1 per cent another significant drop from 13.2 per cent a year earlier. The Transportation and Storage sector also experienced a slowdown as well, with growth dropping to 3.6 per cent from 4.6 per cent in 2023. A notable decline in consumption of light diesel, primarily used in road transport, indicates reduced activity in this vital sector. Rail transport was similarly affected, with a decrease in passenger numbers through the Standard Gauge Railway (SGR) by 8.5 per cent. However, cargo transport via the SGR saw an 8.7 per cent increase, suggesting shifts in demand patterns that could influence future transport planning. The slowdown in the economy is a major blow to President William Ruto's administration, which has made job creation a key priority. The slowdown in the economy poses a considerable challenge for President Ruto, following the massive protests over the cost of living crisis and new taxes.

Job prospects for Gen Z dim as Kenyan economy slows in Q2

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