The Kenyan construction industry is steadily growing with the real estate and construction sectors as key forces of economic growth. For instance, “The Kenyan economy remains strong but this year we have seen a decline in growth compared to last year,” notes Cytonn Investments. The latest Kenya National Bureau of Statistics (KNBS) Q2’2017 GDP data estimates that the economy expanded by 5.0 percent compared to 4.7 percent recorded in Q1’2017, and 6.3 percent growth recorded in Q2’2016. “The slowed but robust growth was supported by activities of Transport and Storage, Real Estate, Information and Communication Technology, Accommodation and Food services and a slightly improved growth in Wholesale and Retail Trade,” read part of the KNBS report. Growth in the construction sector in the review quarter was robust despite being slower than that of the second quarter of 2016 mainly driven by the ongoing activities in property development as well as civil works being implemented by the Government. KNBS however, noted, “The slowed growth was evidenced by 6.3 percent decline in cement consumption which is a key input in the sector.” “The slowdown was further explained by declines in the volume of imports of construction materials such as iron and steel, and cement by 28.9 and 27.1 percent, respectively. Credit to building and construction activities declined by 1.2 percent, a further reflection of relatively less activity in the sector as a result of the enactment of the Banking Amendment Act 2015,” the report states. Further, Cytonn Investments concurs with the reduced activity especially the real estate sector partly due to the political uncertainty brought about by the extended electioneering period and oversupply in the market segments, especially in the commercial office segment. Unlike the commercial office segment, the residential sector, “Is only temporary, and is expected to recover in the near-term and increase in the medium-term,” observes Cytonn. Besides the challenges, Oxford Business Group the Kenya 2017 report says, “ In the longer term, the sustained growth of the sector will be dependent upon the ability to bring more private funding into projects on the ground.” Further, Moving beyond the elections, Kenya’s strong growth fundamentals are likely to bring more foreign capital into the market notes analysts. “We expect slow performance given the postponement of the 2017 elections and the political unrest in various parts of the country. However, should we hold peaceful elections, we expect the market to recover and transactional volumes to increase in Q1’2018,” from Cytonn. On the other hand, profit margins in the cement industry are declining. With eight players in the market, there has been an increase in capacity than local demand which has led to pricing competition.
Mchuchuma Coal Mining and Liganga Iron Ore Mining; Central Railway Line; Revamping of Air Tanzania Company Limited (ATCL); Construction of Liquefied Natural Gas (LNG) plant in Lindi; Establishment of Special Economic Zones (SEZ) in Tanga, Bagomoyo, Kigoma, Ruvuma, and Mtwara; Establishment of Kurasini Logistics Center; Training of youths in specialized areas including oil and gas, engineering, and health; Establishment and development of Mkulazi as a model agricultural city; Procurement of new and rehabilitation of existing ships for Victoria, Tanganyika and Nyasa Lakes; Upgrading of Kidahwe-Kanyani-Kasulu-Kibondo-Nyakanazi road to bitumen standard; Upgrading of Masasi-Songea-Mbamba Bay road to bitumen standard. According to Deloitte, Kenya with 11 projects has the greatest
