Investors in the construction industry business will be not be a happy lot after data from the Kenya National Bureau of Statistics (KNBS) showed an increase in the cost of materials and labour over the period when the first quarter is compared to the fourth of the financial year.
KNBS has categorized the price indices into building index, civil engineering index and overall construction index.
The data which covers the year 2022/2023 and broken into quarters adds the cost of hiring or leasing construction equipment eased during the same period.
However, transport and fuel recorded the most shift in the construction industry that led to an inflation of 7.1 per cent in the sector for the year ending December 2022.
The shift in transport and fuel was fueled by fuel prices which changed by 12.86 per cent during the year.
Diesel, which is the most used fuel in construction transport activities retailed at Sh110.60 in January 2022 while petrol went for Sh129.72.
According to the Construction Input Price Indices (CIPI) published by KNBS, inflation was 7.1 per cent in the fourth quarter of 2022 compared to 3.33 per cent in the same period in 2021.
The report adds that the index rose from 106.12 in the fourth quarter of 2021 to 113.65 in the fourth quarter of 2022.
KNBS further reports that in the second quarter of 2022, the index on building materials stood at 121.47 compared to 118.78 in the first quarter, 118.47 in the third quarter and 118.77 in the fourth quarter of 2022.
The increase in the cost of construction is mirrored in the price increases for hardcore, quarry products, mix and precoated chippings, concrete and asphalts, steel and reinforced bars.
Prices of dense bitumen macadam (DBM), glass and glass putty, and roofing sheets, among other products have shot up massively.
The increase in the cost of construction has also been echoed by Integrum, a project management company comprising architects, quantity surveyors and engineers.
However, Integrum notes the only way investors can avoid the inflation prices is to go the cheaper way which means one has to compromise on quality and structural integrity.
It adds the cost of construction in the country is expected to continue going up in the near future.
This is due to the weakening shilling, trade over taxation, soaring inflation and high cost of energy.
