Kenya construction gains steam after interest rates cut

Construction workers build a house in Kisumu.
Construction workers build a house in Kisumu. PHOTO/FILE
The Kenyan construction industry recorded significant growth in the second half of 2012, signalling the industry’s recovery after a slump caused by high interest rates.

Cement consumption, a key indicator of growth in construction, was four per cent higher in H2 of 2012 than a similar period a year earlier.

According to the Kenya National Bureau of Statistics (KNBS) data, cement consumed in the last half of 2012 rose to 2,058,931 metric tonnes compared to 1,980,070 metric tonnes in 2011, representing an increase of 78,861 metric tonnes.

On the other hand, the quantity of cement produced in H2 of 2012 rose by 2.5 per cent to 2,375,129 metric tonnes up from 2,318,116 metric tonnes a year earlier.

Property consultancy firm Knight Frank recently predicted that the local industry would recover as developers finance new project following the conclusion of the March 4 General Election.

The firm’s Africa Report 2013 said the sector would gather steam by June when the polls mood passes and the effects of the falling interest rates become tangible.

“With interest rates slowly falling and a relatively stable economy, a post-election recovery is expected in this sector in the second quarter of 2013,” the report said.

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