Syovata Ndambuki

On May, 20, 2024, the Kenya National Bureau of Statistics launched the Economic Survey 2024, a report that captures critical numbers in key sectors fueling Kenya’s economy. Construction is one of the sectors featured in the report, with interesting findings affecting different areas of the industry.

A Growing Housing Budget

The survey shows that the government increased its housing budget significantly, from KSh 10.5 billion in 2022/23 to KSh 92.5 billion in 2023/24. This increase is possibly informed by the Housing Levy collections which were a boost to the Affordable Housing agenda. Estimated collections for the 2023/24 fiscal year were estimated to be Kshs 63 Billion and the numbers are expected to hit Kshs 89 Billion in 2024/26.

2.1% increase in employment

The survey further reveals that the number of dwelling units completed by the State Department for Housing and Urban Development (SDHUD) almost doubled to 3,357 housing units in 2023. And employment levels in construction in the public sector rose by 2.1 per cent from 9.5 thousand in 2022 to 9.7 thousand persons in 2023. Despite the increase, these figures present a stack difference between the numbers shared by the Ministry of Lands and Physical Planning during the Affordable Housing Bill signing earlier in the year. In the private sector of the industry, employment levels rose by 1.8 percent to 226.3 thousand workers in 2023.

Reduced cement consumption

Consumption of cement, a key economic indicator, dropped by 3.1 percent to 9,201.8 thousand tonnes in 2023. This could indicate many things, given that the number of buildings approved and constructed in Nairobi County (a major construction hub) is on the rise. Less cement consumption could indicate the rise of alternative construction methods that require less cement.

The high cost of cement might also have influenced the low consumption levels as the years 2022 and 2023 saw an increase in the retail price of cement bags around the country. According to the economic survey, the year on year (YoY) inflation for the construction sector was 4.16 per cent in the fourth quarter of 2023, compared to 7.10 per cent in the fourth quarter of 2022. Cement, bitumen, pre-coated chippings and hard-core account for this increase as they attracted the highest price jumps.

Construction boom in residential

Nairobi County has had a steady increase in the number of building completed over the last five years. The survey captured the number of buildings approved, those completed and their value since 2019. In 2023, 22,093 buildings (both residential and non-residential), worth KShs 153.3 Billion were completed. This is a notable increase, compared to 2019, when the number of completed buildings in Nairobi County stood at 13,976. The bulk of these buildings across all years are residential.

The value of building plans approved by the Nairobi City County (NCC) increased from KSh 162.5 billion in 2022 to KSh 220.0 billion in 2023. The increase is partly attributable to the implementation of the Affordable Housing Program (AHP) which attracted more buildings in residential sector.

Constrained Roads’ Budget

In 2023/24, the government’s total expenditure on roads is KSh 179.5 billion a minor increase from KSh 178.2 billion in 2022/23. Total road development expenditure is expected to decline from KSh 111.0 billion in 2022/23 to KSh 99.3 billion in the period under review. Funds disbursed by the Kenya Roads Board to road agencies from the Roads Maintenance Levy Fund (RMLF) are expected to increase from KSh 67.2 billion in 2022/23 to KSh 80.2 billion in 2023/24.

Construction wages and Gender Gap

When it comes to the wages paid to construction workers, semi-skilled workers attracted an increase while the rest had to deal with reducing wages. Skilled workers endured the highest percentage of reducing monthly incomes. Monthly average basic wages for the unskilled and skilled workers declined by 4.5 per cent and 10.9 percent respectively, while that of semi-skilled workers rose by 3.0 per cent in 2023.

The Accommodation and Food Service industry, which cuts across the hospitality arm of Commercial Real Estate had the highest increase in employment opportunities at 27.8% due to increased international travel.

Many industries analysed in the survey had significant disparities between male and female workers.

“In 2023, the number of males in employment were more than the number of females in all industries except in Financial and insurance activities; Education; Human health and social work activities; accommodation and food service activities; Activities of extraterritorial organizations and bodies and; Activities of households as employers; undifferentiated goods and service producing activities of households for own use” read a part of the report.

The construction industry had one of the biggest gender gaps. In 2023, there were 195,200 male workers in the construction industry and only 40,600 females workers. Though the number of male workers remained the same between 2022 and 2023, the number of female workers increased slightly from 36,500 workers in 2022.