Nairobi’s 11-month construction approvals dip to eight-year low

The value of building approvals in the 11 months to November in Nairobi fell to Sh150.5 billion, which is the lowest in eight years, attributed to an economic slowdown caused by the Covid-19 pandemic.

The last time the city county saw approvals this low by November was in 2012 at Sh171.3 billion. Data from the Kenya National Bureau of Statistics (KNBS) shows that applications for residential buildings stood at Sh105.6 billion, the lowest in six years. Non-residential segment declined to Sh44.8 billion, representing a nine-year low for the 11-month period.

“The declining performance of the larger built environment industry is bound to continue for a significantly lengthy period as the country continues to suffer from the impacts of high national debt, labour shortages and reduced infrastructure spending amid a depressed economy,” Architectural Association of Kenya (AAK) president Ms Mugure Njendu said.

“In terms of recovery, the residential and commercial construction sectors which were already experiencing a declining performance due to an oversupply of spaces prior to the Covid-19 pandemic are expected to take the longest time to recover.”

An AAK survey in June on the impact of Covid-19 on the built environment showed that 87.5 percent of consultants recorded significant decreases in client enquiries for new projects.

“Consultants were increasingly finding it difficult to obtain construction supplies and materials with another 31.3 percent of the respondents reporting that the period had seen an escalation in difficulty of obtaining development approvals.”