Construction of the Standard Gauge Railway terminal near Port Reitz in Mombasa. The rail project is a key employment generator. PHOTO | SALATON NJAU
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Construction expanding by 13.6 per cent last year compared to 13.1 per cent in 2014, data from Kenya National Bureau of Statistics (KNBS) shows .
Construction sector recorded the fastest growth last year driven by the laying of the standard gauge railway, making it a key employment generator.
Construction — comprising new buildings, roads and rail – saw a frenetic activity, expanding by 13.6 per cent last year compared to 13.1 per cent in 2014, data from Kenya National Bureau of Statistics (KNBS) shows .
The value of compensation of employees in the construction sector also recorded the fastest growth of 46.3 per cent attributable to large scale infrastructural projects.
“This growth was to a great extent buoyed by the development of transport infrastructure such as the continued implementation of the first phase of the standard gauge railway, development of the road network, expansion and rehabilitation of facilities at the airports and improvement of port facilities,” reads part of the Economic Survey released Tuesday by KNBS.
As at December 2015, 174 kilometres of the Standard Gauge Railway from Mombasa to Nairobi had been constructed at a cost of Sh113.9 billion.
The project is estimated to have created 19,000 jobs provided directly by the construction firm China Road and Bridge Corporation and an additional 8,000 through the sub-contractors.
Total wages paid by the sector rose to Sh92.1 billion from Sh73.5 billion, underlining its direct impact in local households.
The sector also benefited from the implementation of mega energy projects such as Olkaria 1V, Olkaria 1 and wellhead geothermal projects.
Real estate developments also contributed to the improved performance of the sector as private investors pushed to take advantage of the housing deficit in the country.
The index of reported private building works completed in major towns rose to 367.1 last year from 341.4 in 2014 while public building works index increased to 116.2 from 106.1 over the same period.
Cement consumption went up by 9.9 per cent in 2015 to 5.7 million tonnes in tandem with the growth in the building and construction sector.
Commercial banks and saccos increased their lending to the sector, underlining the expansion. Loans to building and construction activities increased by 32.3 per cent to Sh106.3 billion from Sh80.4 billion the previous year.
Real estate sector has enjoyed more than a decade long rally as infrastructure developments opened up new areas for residential and commercial projects.
The real estate sector — measured in terms of rent earnings — expanded by 8.9 per cent compared to 8.5 percentage growth recorded in 2014.
Construction of the greenfield terminal at JKIA was expected to fuel expansion of the sector in the coming year with its recent termination expected to dilute the expectations.
Construction sector contributes 4.8 per cent of the Kenyan economic output.
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