JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

CONSTRUCTION MANAGEMENT DEPARTMENT

QUANTITY SURVEYING

KASIVA C MUTISO

AB 244 3013/2013

CONSTRUCTION ECONOMICS

ABC 2404

ASSIGNMENT

SEPTEMBER 2016
TASK 1: WRITE AN ESSAY ON THE ROLE OF CONSTRUCTION IN THE NATIONAL ECONOMY

Behind the magnificent buildings that glitter our cities, the bridges that connect people from

different sides, road networks that necessitate easy travel from one point to another, air

terminals where planes land at, is the construction industry.

The construction industry makes a vital contribution to the competitiveness and prosperity of

the economy. A modern, efficient infrastructure is a key driver of productivity, and the

construction industry has a major role in delivering the built infrastructure in an innovative and

cost effective way.

Firms throughout the economy are dependent on the performance of built infrastructure such

as roads, rail, power stations and telecoms networks to remain competitive, and inward

investors will consider the quality of the built infrastructure as one of the key factors when

considering location decisions.

Our productivity also depends on the efficiency and nature of the built environment. The

flexibility, mobility and effectiveness of the workforce and the productivity of firms depend on

the availability of properly configured and located houses and premises.

The design, construction and operation of our built environment have other important

economic effects, for example, on the rate at which we use resources. Buildings are responsible

for almost half of the country’s carbon emissions, half of our water consumption, about one

third of landfill waste and one quarter of all raw materials used in the economy.
It is obvious that construction industry is the pivotal element in infrastructure development.

Byoungki Kim stresses that infrastructure development is one of the most integral parts of the

public policies in developing countries. Good infrastructure such as road construction helps to

lower productivity costs hence contributing to economic growth. The construction of relevant

infrastructure like roads in rural areas has a considerable impact on national wealth

distribution.

The output of the Kenyan Construction industry rose 13.1 percent in 2014 compared to 5.8

percent in 2013, according to the latest figures from the Kenyan National Bureau of Statistics.

The Economic Survey 2015, attributed the double digit expansion to the steady growth in the

property development, a vibrant real estate sector and the ongoing mega infrastructure

projects. Some of the projects are earthworks construction for the Mombasa Nairobi SRG

project, expansion of major airports as well as the construction of roads and energy

infrastructure across the country. The building and construction industry contributes 4.8 % of

the Kenya Gross Domestic Product, which rose to Ksh. 5.36 trillion from Ksh. 4.73 trillion in

2013- representing a nominal growth of 13.3%. Construction was the best performing sector

because of the increase in funds allocated to roads and railway construction as well as

rehabilitation of existing roads (Ann Waiguru).