SURVEY

High cost of labour and materials reduces growth in construction

In Summary
  • The sector recorded a 6.4 per cent growth compared to of 6.9 per cent in 2018.
  • The cost of materials for residential and non-residential buildings increased by 6.5 per cent and 1.8 per cent, respectively.
Treasury Cabinet Secretary Ukur Yatani launch the 2020 Economic Survey at Treasury on 28 April 2020.
Treasury Cabinet Secretary Ukur Yatani launch the 2020 Economic Survey at Treasury on 28 April 2020.
Image: FREDRICK OMONDI

The construction sector registered a slight drop in growth as cost of labour and materials went higher, the 2020 Economic Survey shows.

The sector recorded a 6.4 per cent growth compared to of 6.9 per cent in 2018.

The cost of materials for residential and non-residential buildings increased by 6.5 per cent and 1.8 per cent, respectively.

 

Similarly, labour cost recorded an increase of 4.5 per cent in 2019 compared to 5.3 per cent in 2018.

The percentage change in cost of materials was 5.7 per cent in 2019 compared to 3.1 per cent in 2018.

Loans and advances from commercial banks to the construction sector grew by 1.6 per cent from Sh114billion in 2018 to Sh115.8 billion in 2019.

The affordable housing pillar in the President’s big four agenda saw the number of completed public residential buildings increase from 450 units to 530 units.

5,134 housing units are currently under construction by the National Housing Corporation and the State Department of Housing of which 4,700 housing units commenced in 2019.

Total number of completed private residential and nonresidential buildings by NCC went up to 13,976 units in 2019 compared to 12,725 units in 2018.

Index of Government expenditure on roads increased from 415.4 to 456.8 due to major road projects undertaken in 2019.

 

During the same period, the index of reported public building works completed declined by 32.6 per cent from 59.4 points to 39.0 points.

The index of reported private building works completed in Nairobi City County increased by 3.5 per cent from 466.2 points in 2018 to 482.3 points in 2019

The Government has continually invested in the construction and rehabilitation of road infrastructure across the country in order to spur economic growth.