Cement consumption slumped to a four-month low in February as investors either froze or scaled down construction projects on the economic uncertainty caused by the Covid-19 pandemic.
Data by the Kenya National Bureau of Statistics (KNBS) shows that cement consumption stood at 606,547 tonnes in February—marking three successive months of slumps and the lowest level since October last when 723, 124 tonnes of the commodity was utilised.
Cement consumption has been declining since the last quarter of 2020 on reduced activity in the infrastructure and real estate sectors that have been scorched by tough economic conditions as well as labour shortages.
New projects are also hampered by low demand for office spaces as companies adopt working from home formulas.
Central Bank of Kenta data shows that Kenyan households and businesses have generally taken to precautionary spending and thin investment opportunities in an environment fraught with uncertainties.
This is reflected by the fact that businesses and households stockpiled an additional Sh483.3 billion of savings over the Covid-19 pandemic period- the biggest in over a decade.
The banking sector gross deposits closed in January at Sh4.03 trillion, translating to a 12 per cent jump from Sh3.55 trillion in a similar period last year.
Cement is closely intertwined with the built environment that is affected by a go-slow in the construction sector.
Real and estate and infrastructure projects have remained depressed. For example, the value of building approvals in Nairobi fell Sh33.4 billion in the two months to February, compared to a similar period last year as investors froze investments on economic uncertainty.
Data by the KNBS shows that the value of approvals fell to Sh18.4 billion, representing a 35.5 per cent decline.
Realtor HassConsult’s quarterly land price index also showed that prices in Riverside, Parklands, Loresho and Kileleshwa recorded drops in asking prices of 1.7 per cent, 0.9 per cent, 0.2 per cent and 0.6 percent respectively.
(BUSINESS DAILY)
