The value of buildings that received approvals for construction in the first six months of the year in Nairobi increased sharply by 93 percent to Sh85 billion from last year, defying election jitters.
The latest data from the Kenya National Bureau of Statistics (KNBS) show that the value of approvals in the January to June period rebounded to almost pre-Covid levels. This points to a busy season for county officials involved in the approval process, as the rest of the country prepared for the August poll.
The rebound was largely driven by residential buildings, which accounted for 75 percent (Sh63.6 billion) of total value of approvals in the period.
The rise in building approvals went against the tide of an election year whereby private sector spending is muted in anticipation of economic disruptions.
The government has stepped up efforts to revive the housing sector to create more jobs and grow the economy.
The building and construction sector contributed 7.0 percent to the country’s gross domestic product (GDP) in 2021, while the real estate sector accounted for 8.9 percent of Kenya’s total production last year.
The two sectors have shown unmatched resilience over the years, being among the few sectors that did not contract during the pandemic.
The growth recorded by the sectors was faster than the overall economic growth in the second quarter of this year. Construction expanded at 5.8 percent while real estate grew at 5.5 percent, higher than the 5.2 percent posted by the whole economy in the reporting period.
Construction and real estate combined accounted for 230,600 formal jobs as of December last year, according to the Economic Survey, representing 8.0 percent of the total formal jobs.
Available data suggest that an employee in the construction sector takes home a monthly salary of Sh63,000 while one in real estate earns Sh27,280 monthly.
However, most workers in the two sectors remain in the informal space, which accounts for 83 percent of all employed Kenyans.
The buoyant performance was backed by an 8.0 percent jump in cement consumption in the first eight months of the year to hit a record 6.28 million tonnes.
Cement prices jumped by over 50 percent to Sh850 in Nairobi and even crossed the Sh1,000 barrier in different parts of the country for a 50 kg bag but have since eased to previous prices of Sh600 per bag.
The jump in prices was largely driven by the invasion of Ukraine by Russia, which led to supply chain disruptions globally and a shortage of coal that is used in the production of clinker.
