The construction industry experienced a downturn for two consecutive quarters last year, marking a dismal performance not seen in over two decades. The sector’s decline, coupled with a slowdown in mining, and the impact of high interest rates, resulted in the slowest economic growth in four years, despite favourable exchange rates and low inflation, according to a recent report by the Kenya National Bureau of Statistics (KNBS).
The KNBS report highlighted that the construction industry continued to face negative growth in the third quarter of the year, contracting by 2.9 percent from July to September. This followed a 2.0 percent decline in the second quarter.
This downturn in the construction sector reflects significant budget cuts to major infrastructure projects, particularly in the roads sector, along with rising costs of key building materials such as cement and bitumen. KNBS noted, “The sector experienced a 2.0 percent contraction during this period, compared to a 4.0 percent growth in the third quarter of 2023.”
