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The Kenya National Bureau of Statistics recently released the Economic Survey 2018, highlighting the performance of various sectors of the economy in 2017. The survey shows that the construction sector grew by 8.6 per cent compared to 9.8 per cent growth in 2016.

It also revealed that building activity in Nairobi County increased by 10.2 per cent from KES 77.7 billion in 2016 to KES 85.6 billion in 2017 despite election volatility, based on the number of new private buildings issued with certificate of occupancy.

The total number of those private buildings issued with certificate of occupancy increased by 9.7 per cent from 10,268 in 2016 to 11,202 in 2017 where residential buildings accounted for 85 per cent of the completed private buildings during the review period.

However, the value of new public buildings completed by the State Department for Housing and National Housing Corporation (NHC) shrunk from KES 3.8 billion in 2016 to KES 2.3 billion in 2017 but the number of public buildings completed increased by 9.6 per cent to 1,164 units..

The value of building plans approved by the County also decreased by 23.2 per cent from KES 308.4 billion in 2016 to KES 240.8 billion while cement consumption also decreased by 8.2 per cent to 5,788.9 thousand tonnes during the same period.

Meanwhile, the index of reported private building works completed in Nairobi City County rose from 409.3 in 2016 to 443.1 in 2017, an indicator of increased building activity during the year while the index of reported public building works completed in major towns registered a decrease from 69.2 in 2016 59.4 in 2017.

Increased Costs

Building became a more expensive affair as the cost of materials increased by 3.0 per cent in 2017 compared to a 1.8 per cent the previous year with residential buildings recording the highest growth in the cost of building by 3.8 per cent. However, construction labour costs in the sector registered a slower growth of 6.6 per cent in 2017 compared to 12.3 per cent in 2016.

During the period, the National Housing Corporation advanced a total of 73 loans amounting to KES 91.7 million to individuals for construction and improvement of residential houses in the counties. The highest number loans were issued to residents of Trans Nzoia and Kiambu counties.

With election uncertainties behind, and the government steering it’s development agenda, 2018 could easily outperform 2017.