Money Markets

Construction jobs fastest growing since 2007

A house under construction. Construction sector generated new jobs at the fastest pace. FILE
A house under construction. Construction sector generated new jobs at the fastest pace. FILE 

The construction sector generated new jobs at the fastest pace in the five-year period to 2012, reflecting high potential of the industry to boost employment.

According to the Economic Survey 2013, the number of jobs generated by construction activities grew by nearly 62 per cent between 2007 and 2012, well ahead of other economic sectors.

The number of people who worked in the construction industry stood at 99,100 last year, having risen by 61.9 per cent since 2007, the survey showed. This happened even as the average monthly wage remained low at Sh34,782, putting remuneration in the sector in the bottom half of all economic classes.

While private sector construction (including real estate) saw the huge increase in wage employment during the period, the public sector experienced a decline by 6.5 per cent in the creation of employment.

However, the wages for the activities in the public sector are small, at just a fifth of those in the private sector. The construction sector has been buoyant in the past five years, thanks to robust construction of roads, high demand for homes and office space—which in turn has spurred frenetic activity in the construction business.

Data provided by property index and management firm HassConsult show that the average value for a property in Nairobi, for example, had more than doubled since 2007 to Sh24 million as at December 2012. In the year 2000 the average prices of Nairobi properties was only Sh7 million, according to HassConsult.

Construction activities (including real estate) has also tended to be among those consuming bank credit at the fastest rate in the past few years. In December 2012, construction (and real estate) held Sh246 billion —nearly a fifth—out of the total of Sh1.33 trillion in loans from commercial banks.

The boom in the construction sector has also seen the related area of quarrying being among those whose employee earnings has risen the fastest in the past five years.

In the five-year period between 2007 and 2012, the quarrying activities – as combined with mining – saw average employee earnings rise by 33.4 per cent although its employee numbers remain small at only 8,400 last year.

The worth of production in construction activities increased by 3.9 per cent in constant prices in 2012 from the previous year. In the last five years, the sector has grown by an average of 3.9 per cent every year in real terms even when the average for the economy was slightly below at 3.8 per cent.

In 2012 relative to the previous year, the growth in employment in the sector was 11 per cent, the largest for any sector in a single year. In 2012, the closest to the construction sector in employment terms within the private sector was ICT whose numbers grew by 7.0 per cent.

Shortly before his exit in March, former President Mwai Kibaki said the ICT sector was in a position to create up to 200,000 formal sector jobs in the coming years, with the setting up of the Konza Technology City.

ICT was also the second largest in terms of generating jobs in the past five years with 37.1 per cent increase. This has been made possible by the growth of the telecommunication services providers such as Safaricom, Airtel, Orange, yuKenya and AccessKenya.

The third largest provider of new jobs in the private sector in the past five years has been human health and social work, which created 35 per cent more jobs over the period. This would include jobs for doctors and nurses.

girungu@ke.nationmedia.com