Market News

Price of construction materials rise sharply


Construction site crane is used to placing precast concrete panels. PHOTO | COURTESY

The price of key construction materials, including steel, paint, and cement have shot up due to local shortage, prompting industry groups and contractors to warn of a slowdown in the sector.

This is expected to increase the cost of acquiring or building new homes.

“An assessment of the market trends has shown that some steel products have increased by up to 40 percent since December 2021 to date,” said the Architectural Association of Kenya (AAK).

The shortage is worsened by supply fears related to Russia’s onslaught on Ukraine, with the ongoing war and an array of Western sanctions raising disruption fears.

The prices of steel in the international market have moved up by around $135 (Sh15,390) a tonne since February 2022 when the conflict started and is projected to rise further.

Locally, a kilo of steel has risen to Sh180 from Sh100 late last year.

Steel is used to make roofing sheets, reinforcement bars, steel beams and columns, windows, and doors, among other products.

Russia and Ukraine account for nearly 20 percent of the global export of steel.

“I see implications as anything that impacts building materials ultimately affects the cost of building,” said Daniel Ojijo a Nairobi-based developer.

Bamburi Cement Plc #ticker:BAMB became the latest company to announce plans to increase prices of its products by between two and 10 percent effective March 10 due to the higher cost of input raw materials.

“We wish to call upon the Kenya government to consider adopting tax concessions for paint, steel and cement manufacturers as well as sector-specific stimulus packages and policies that will help address the situation and cushion the construction industry which contributes an average of 7 percent to the country’s GDP,” said AAK.

A bag of cement has risen to between Sh800 and Sh1,000 from Sh600 — depending on brand— in western Kenya that is grappling with short supply.

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