The Economic Survey 2026 by the Kenya National Bureau of Statistics (KNBS) presents a cautiously optimistic outlook for Kenya’s labour market. Employment in the recent past has expanded. This has improved earnings in several sectors such as construction and manufacturing, which have continued to rebound strongly. Despite this, the report raises greater concern for policymakers over how Kenya can transform job growth into long-term, quality employment that can withstand both domestic and global economic pressures. The survey indicates that employment across all sectors grew by 4.0 per cent in 2025, reaching 21.6 million people. The informal sector remains the top employer, accounting for 18.1 million jobs while generating 87.2 per cent of all new employment opportunities. This demonstrates the clear resilience of Kenya’s entrepreneurial economy and reveals a structural challenge, as many Kenyans continue to rely on low-income, unstable work with limited protections. As Kenya looks forward, we see the focus shifting from simply increasing employment numbers to creating productive, secure, and inclusive jobs.
Global Lessons for Kenya’s Labour Market
From an international perspective, the 2025 output provides important lessons that Kenya can carry forward as best practices. Across major economies, governments adopted different fiscal and monetary policies to stabilise labour markets and protect growth. For example, in the United States, the unemployment rate rose from 4.0% to 4.2 percent partly due to a reduction in the federal workforce and reduced immigration. Meanwhile, in countries like Germany, government spending increased to support consumption and economic recovery, even as unemployment rates declined.
Further, across various advanced economies, central banks have maintained tight monetary policies to control inflation. These measures have managed to reduce inflation without triggering severe market recessions, thereby allowing global unemployment to remain relatively stable at 4.9%. Closer to home, we see South Africa focus on structural reforms in logistics and electricity reliability to attract private investment and support employment.
These examples offer valuable lessons for Kenya, i.e., sustainable job creation depends not only on economic growth but also on stable policy environments, reliable infrastructure, and targeted government intervention.
The Success of the Construction and Manufacturing Sectors
One of the strongest performers in Kenya’s labour market was the construction sector, which recorded employment growth of 6.7% in 2025. The Government-backed infrastructure development and the Affordable Housing Programme have played a major role in driving this expansion. This highlights the powerful role that public investment can play in stimulating employment across sectors such as transport, cement production, engineering, and retail. In the future, Kenya should maximise the long-term benefits of these projects by prioritising local sourcing, youth apprenticeships, and technical skills development.
Similarly, the manufacturing sector has continued to anchor formal employment growth. The sector accounted for 16.3% of private-sector wage employment, while Export Processing Zones experienced strong growth driven by apparel and agro-processing industries.
However, we recognise that future growth cannot rely solely on exports. Decline in global trade growth and geopolitical tensions could affect external demand in the coming years. Kenya must therefore strengthen domestic industrial capacity through value addition, affordable energy, and support for small and medium manufacturers. Policies that encourage local textile production, agro-processing, and industrial innovation can help create more resilient employment opportunities.
Addressing the Digital Opportunity Gap
Despite significant investment in digital infrastructure, the survey reveals a concerning mismatch between training and employment outcomes. For instance, in the Jitume Digital Programme, digital hubs that have been equipped with virtual infrastructure increased by 35.2%, despite the decline in the number of youths linked to online jobs from 8,062 in 2024 to 6,200 in 2025. This highlights a key lesson for the future: infrastructure alone does not guarantee employment. Kenya must build stronger partnerships between the government, private-sector employers, online work platforms, and innovation ecosystems to ensure digital training aligns with actual market demand.
We see that the expansion of Konza Technopolis offers an important opportunity in this regard. This success depends on how quickly it attracts investors who can generate scalable jobs in areas such as software development, data services, digital marketing, artificial intelligence support, and remote business operations.
The Wage Gaps and Economic Inclusion
The survey reveals widening differences between public- and private-sector earnings. At the same time, private-sector real earnings grew by 3.9%, while public-sector real earnings declined by 2.2%. If this trend continues, the government may struggle to attract and retain skilled professionals in essential sectors such as healthcare, education, and public administration. Therefore, reforms must focus not only on wage sustainability but also on improving working conditions, productivity, and career progression within the public sector.
Equally important is ensuring that economic growth becomes more inclusive for Women, youth, and persons with disabilities who continue to face barriers to meaningful economic participation despite increased procurement opportunities and empowerment programmes. Flexible work arrangements, financial inclusion initiatives, and targeted enterprise financing could significantly improve economic participation and household resilience.
A Future Built on Quality Jobs
Ultimately, the Economic Survey 2026 shows that Kenya is creating jobs, but the next stage of economic transformation will depend on the quality and sustainability of those opportunities. The future of work in Kenya will be shaped by how effectively the country aligns education with industry needs, strengthens manufacturing, expands digital employment opportunities, and supports informal workers in transitioning toward more productive livelihoods. Kenya’s greatest challenge is no longer simply job creation. It is building an economy where growth translates into stable incomes, innovation, and meaningful opportunities for millions of citizens.
