China’s Supply Disruption Affects Construction Sector
Building and construction sector in the country is on the downward curve after the prices of materials hiked by 10 percent following pandemic.
Recent reports by suppliers indicate that supplies from China have dropped significantly due to the coronavirus embargo, affecting the demand and supply curve in the country.
China has been among Kenya’s most preferred trade partners for building and construction materials ranging from electrical equipment, roofing sheets, to tiles, among others.
According to the Architectural Association of Kenya (AAK) president Mugure Njendu, the situation might worsen in the next few months if the exporters’ volume of production will reduce by 15 percent as predicted by experts.
“As a result, a sharp decline in the production of construction materials is expected as well an increase in related prices,” Ms. Njendu said.
Currently, the prices of materials such as Gypsum board, fiberglass panels, acoustical ceiling tile, metal studs, and paint have increased significantly.
“The government and the Kenya Association of Manufacturers should work to maintain price control as possible,” stated Ms. Njendu.
There is a dire need for the Government to strengthen the local manufacturing in a bid to bridge the supply gap. Previously, the industry has been characterized by a challenging process in matters issuance of permits.
AAK’s 2019 report indicates that the value of approved buildings in the city saw a significant reduction from Sh210 billion in 2018 to Sh141.27 billion.
Ms. Njendu insisted on the need for the Government reviewing the force majeure clause purposely to cushion contractors.