How inflation pushed up cost of constructing a house last year

Putting up a home has become more expensive in the last one year as new data showed prices of metal doors and windows increased the most over the period. The data from government statistician which lists 22 products entailing the material component shows how inflation contributed to the increase. The data analyses four components of building namely materials, fuel and transport, labour and equipment. The Construction Input Price Indices by Kenya National Bureau of Statistics (KNBS) indicates that the cost of building materials went up 2.02 per cent during the period. This is compared to the previous year when the cost of materials did drop by 1.47 per cent. Overall, the building cost index shows an increase of 3.24 per cent. However, of the four building cost components, fuel and transport had the highest increase of 13.19 per cent while equipment had the least. Transport costs increased by 11.67 per cent within the period while fuel went up 15.42 per cent. The cost of equipment, which had the least increase of 0.83, remained relatively the same as the index closed the year at 104.44 from 103.61 in the first quarter of 2023. The price of fuel in January 2023 and December 2023 was relatively the same even as there were periods within the year that it shot to as a high as sh217, in October. In January, the cost of petrol stood at sh212 while diesel was Sh201. This was the same in December. Fuel as well, was a leading contributor of construction costs in 2022 with then data from KNBS showing it pushed the pries up 7.1 per cent. Then, however, changes in transport and fuel prices as a component of building was just 6.18. Transport and fuel had the most increase of the four components recorded at 8.52 per cent. Then, equipment went up 1.1 per cent while labour dropped 0.65 per cent and materials by 0.1 per cent. The index in the price of metal doors and windows stood at 114.83 as at December 2023 compared to 103.99 in the beginning of the year, a difference of 10.84 per cent. Steel and reinforced bars went up 3.07 per cent from an index of 172.81 in the first quarter of last year to 175.88 at the close of 2023. Sand saw an increase of 2.89 per cent as paint also went up 4.6 per cent. "The Building Cost Indices increased by 1.55 per cent from 114.74 in quarter three of 2023 to 116.52 in quarter four of 2023. This was mainly due to increases in the indices of cement, hardcore, BRC wire mesh, paving blocks and steel reinforcement bars," reads the release from KNBS prepared by Director General Macdonald Obudho. Apart from building index, the release contains as well civil engineering and construction indices. KNBS states that the Year on Year (YoY) inflation in the construction industry increased by 4.16 per cent from an increase of 7.10 per cent recorded in a similar period in 2022. The material indices, it adds, increased by 2.09 per cent from 121.53 in quarter 3 of 2023 to 124.07 in quarter 4 of 2023. "This is a result of increase in the indices of cement, bitumen, mix and pre-coated chippings and hardcore which recorded an increase of 4.08 per cent, 3.80 per cent, 3.41 per cent and 3.12 per cent to 106.98, 170.18, 130.81 and 109.51, respectively, in quarter four of 2023," the release reads in part.

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How inflation pushed up cost of constructing a house last year

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