Transport pushes up construction costs by 7pc

According to the Construction Input Price Indices(CIPI) published by KNBS, year-on-year (construction) inflation was 7.1 per cent in the fourth quarter of 2022 compared to 3.33 per cent in the same period in 2021.

It adds that the index rose from 106.12 in the fourth quarter of 2021 to 113.65 in the fourth quarter of 2022.

"The highest inflation was in the second quarter of 2022," the report says.

In the second quarter of 2022, the index on building materials stood at 121.47 compared to 118.78 in the first quarter, 118.47 in the third quarter and 118.77 in the fourth quarter of 2022.

This change was a reflection of price increases for hardcore, quarry products, mix and precoated chippings, concrete and asphalts, steel and reinforced bars, dense bitumen macadam (DBM), glass and glass putty, and roofing sheets, among other products.

The baseline of prices (100 per cent) is as of December 2019.

"The Overall Construction Cost Index increased by 0.23 per cent from 113.38 in the third quarter of 2022 to 113.65 in the fourth quarter of 2022," the report states. "This was mainly due to the increase in prices of cement, quarry products and lass products."

It adds that the cost of hiring or leasing construction equipment eased during the period under review.

The price indices have been divided into building index, civil engineering index and overall construction index.

The Overall Construction Index has four weighted categories which are: products, materials, labour and transport and fuel.

Of the four categories, transport and fuel had the most shift in prices for the year ending December 2022 increasing by 8.52 per cent.

This is while equipment went up 1.11 per cent.

Labour dropped by 0.65 and materials by 0.1 per cent.

The shift in transport and fuel was fuelled by fuel prices which changed by 12.86 per cent during the year.

Diesel, which is the most used fuel in construction transport activities retailed at Sh110.60 in January 2022 while petrol went for Sh129.72.

By December 2022, the maximum pump prices for diesel Sh162 and Sh177.30 for petrol in Nairobi.

The increase in the cost of construction has also been reflected in the latest data by Integrum, a project management company comprising architects, quantity surveyors and engineers.

According to their figures, the average construction cost in Kenya this year ranges from Sh41,600 to sh100,800 per square metre.

The Sh41,600 per square metre price is for a standard bungalow in Nairobi and Mt Kenya region.

"It represents an increase of 20.06 per cent over the past year," the survey by Integrum says.

The same, otherwise, would cost you Sh43,250 in Coast while developers in Western and Nyanza would pay Sh42,000 for the same.

"This, respectively, is 19.31 per cent and 13.98 per cent more than you would have spent at the beginning of 2022," it adds.

Integrum notes that developers have an option of going the cheap way which, however, means one has to compromise on quality, aesthetics, structural integrity, and durability and would jeopardise return on investment.

"However, cheap you want to go, you will still end up spending millions of shillings on your construction, as such, we would advise you focus on value for money instead," the firm advises.

Even so, it adds, the cost of construction in the country is expected to continue going up in the foreseeable future due to the soaring inflation, high cost of energy, weakening shilling, trade over taxation, and post-cost management practices.