Kenya’s Building Costs Decline Slightly in Early 2025, Led by Drop in Steel and Bitumen
Kenya’s construction sector experienced a modest but meaningful decline in material costs during the first quarter of 2025, thanks to reduced prices in several major inputs. This shift is expected to bring short-term relief to developers and infrastructure contractors facing budget constraints.
Fresh data from the Kenya National Bureau of Statistics (KNBS) indicates that the cost index for construction materials slipped by 0.3% compared to the previous three months. On an annual scale, the rate of input cost increases fell sharply to 0.18%, a significant drop from the 3.56% recorded in the same period last year.
The overall decrease was largely driven by price cuts in metals and petroleum-based materials. Steel products, including reinforcement bars, dropped by 2.16%, bringing their index level down to 163.94. Bitumen-based surfaces like Dense Bitumen Macadam saw a 2.12% drop, while precoated aggregates were down 1.78%. A combined category of concrete and asphalt materials also saw a 1.48% decline.
The sharpest reduction was recorded in Paving Grade Bitumen, which fell by 4.03%, reflecting reduced global crude oil prices and slower demand for infrastructure across the region. Tack-coat materials, used in road surfacing, also became more affordable, declining by 1.24%.
However, not all material categories followed this downward trend. Cement prices ticked up by 0.92%, reaching an index value of 117.38. Slight increases were also observed in sand (0.61%) and quarry products (1.15%). Smaller gains were noted in paving blocks (0.44%), along with sanitary fixtures and door hardware, which inched higher as well.
Despite recent relief, prices are still considerably higher than levels seen before the pandemic. Most materials remain indexed above 125, when using the last quarter of 2019 as the baseline reference.
Additional indices support the broader trend. The Building Cost Index, which reflects materials used in housing and commercial projects, declined marginally from 118.77 to 118.60. The Civil Engineering Index, tied to public works and infrastructure, also eased from 120.52 to 120.10.
While the current drop in prices offers some breathing room for the sector, the inconsistency across material types means developers must continue to navigate fluctuating costs. Strategic procurement and flexible budgeting remain key as the market adjusts.
