Cement consumption and production of galvanised sheets used for roofing fell this year, new data shows, signalling the slowdown in real estate activity.
Some industry players blamed demotions of buildings and reduced cash flows for discouraging new investments.
The amount of cement consumed in the first nine months of the year fell by 113,096 metric tonnes or three per cent to stand at 4.13 million tonnes compared to 4.24 million metric tonnes in the same period last year, said the Kenya National Bureau of Statistics in the latest update.
For galvanised sheets, data shows the country produced 662 metric tonnes or 0.4 per cent less in the first seven months of the year compared to the same period last year.
The actual production was 155,506 metric tonnes against 156,168 metric tonnes produced in the seven-month period to July 31 last year.
However, for individual Kenyan producers the reduction could even be bigger.
“We have seen reduced sales in cement and galvanised sheets. Cement sales are down 15 per cent and galvanised sheets sales are down 18 per cent,” said Narendra Raval, chairman of Devki, which produces both cement and steel products.
“The main reason is people are scared of continuing with development due to the demotions of buildings. Structures that were approved by other governments 20 years ago or so have been demolished.
"There is also the issue of lower cash flows in the agricultural sector,” said Mr Raval.
For cement, consumption in September was among the lowest in the year standing at 456,473 metric tonnes, a decline of 4,073 metric tonnes compared to the same month last year.