Cement output down with tough economy
Production of cement declined through 2017, signaling a slowdown in real estate sector growth following a tough economic environment.
Cement output, a key indicator of performance in the building and construction sector, reduced by 8.2 per cent or more than 550,000 metric tonnes for the year ending December 2017.
Latest provisional data collated by the Kenya National Bureau of Statistics shows about 6.16 million metric tonnes of cement were produced.
Highest monthly production was recorded in March at 570,522 tonnes with the lowest production recoded at 482,762 tonnes in May. Cement production was recorded slightly below half a million tonnes between August and November.
During the period, cement consumption also declined by 8.12 per cent to 6.30 million tonnes, signaling reduced activity in the sector.
Property and civil works
“The quantity of cement produced increased from 494,518 tonnes in November 2017 to 502,809 in December. Consumption of cement dropped from 459,868 tonnes to 450,960 in December 2017,” KNBS said in its Leading Economic Indicators report for the month of December.
In its quarterly GDP report for the second quarter of 2017, the KNBS said the construction sector’s performance has been mainly driven by ongoing activities in property development as well as civil works being implemented by the government.
“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 per cent, respectively,” the report stated.
Credit to building and construction activities also declined by 1.2 per cent, a further reflection of relatively less activity in the sector.
The KNBS provisional data further points to an increase in production of galvanised sheets – a widely used roofing material despite gradually rising competition from alternative materials.
Output of the sheets increased by 6.3 per cent to stand at 221,883 tonnes in the 10-months to October 2017.
The private sector has also been increasing investment in the real estate sector, targeting largely the mixed-use developments comprising apartments for middle-income earners and shopping malls.