The construction sector, one of the backbones of the country’s economic growth, registered a significant decline in 2024, shrinking by 0.7 per cent down from 3 per cent growth in 2023. 

Indicators in the sector suggested a slowdown in key activities in construction, affecting both public and private projects.   

Data from the 2025 Economic Survey by the Kenya National Bureau of Statistics (KNBS) has revealed that cement consumption declined sharply, raising concerns about the future of the sector’s health as well as the broader economy. 

Cement sales fell by 7.2 per cent to 8,537,000 million tonnes in the financial year (FY) 2024/25, compared to 9,201,800 tonnes in 2023. 

The low demand for cement, a key input in construction projects including roads and bridges, can be largely attributed to a decrease in the number of active projects in the sector, following President William Ruto’s initial cessation of infrastructure investment, which was one of his predecessor, Uhuru Kenyatta’s key agendas.  

The report also reveals that lenders, particularly commercial banks, slashed their credit lending to the construction sector by approximately 12.4 per cent in the FY2024/25. 

“Loans and advances from commercial banks to the construction sector declined from Sh602.7 billion in 2023 to Sh528.0 billion in 2024,” said KNBS.  

Credit cuts from lenders could have great implications in the construction sector, leading to delays and stalled development projects.    

Additionally, with reduced lending, there are higher chances of high interest rates and stricter lending conditions, which could potentially suppress housing demands.  

As a result, there will be a high likelihood of unsold properties as well as increased credit risk in the real estate sector. 

Private sector 

The report further reveals that the private sector employment in construction also suffered a blow, with the number of employees reducing to 223,400 in 2024, down from 226,300 in 2023. 

However, in the public sector, employment in construction increased from 9,700 employees in 2023 to 9 900 employees in 2024. 

On the other hand, in Nairobi, private building plans saw a significant increase in approvals, slightly increasing their value.  

“The value of private building plans approved by the Nairobi City County increased from Sh220.0 billion in 2023 to Sh221.6 billion in 2024,” stated the KNBS report.  

This growth is largely driven by residential projects which accounted for a significant portion of the approvals. 

Conversely, the value of public residential building works completed by the State Department for Housing and Urban Development (SDHUD) declined from Sh11.0 billion in 2023 to Sh4.0 billion in 2024.  

At the same time, the number of residential housing units completed by SDHUD declined by 50.7 per cent to 1,655 units in 2024. 

As the construction sector continues to face several setbacks impeding its growth, the government is expected to increase its expenditure on roads by 29.1 per cent to Sh171.9 billion in 2024/25, compared to Sh133,229 billion in 2023.  

More notably, 2024 recorded improved road construction with the length of road construction having improved in kilometres.