The construction industry in Kenya defied high interest rates to post impressive growth, a new report by Kenya National Bureau of Statistics (KNBS) reveals. Data released by KNBS, reveals that the sector grew by 14.1% in the third quarter of 2015 compared to 8.8% over a similar period in 2015.
Construction loans to the sector grew by Sh22 billion (or 28%) from Sh79 billion to Sh101 billion during the year.
The KNBS says that the sector’s good performance was a major driver in the overall expansion of the economy in the third quarter, with the gross domestic product growing by 5.8% compared to 5.5% over the same period in 2014.
Some players are saying that the industry is likely to be hit again by the high cost of borrowing this year. High interest rates could see project completion delays, postponement or cancellation.
A total of 1.44 million metric tonnes of cement were consumed in the three-month period, a 10.77% jump from 1.30 trillion tonnes in a similar period in 2014. Output of the key commodity, which indicates performance in the sector, rose by 10.58% over the period to 5.33 million tonnes from 4.82 million tonnes produced in the first 10 months of 2014.
