Construction industry in Kenya bounces back, driven by new innovations

Kenya’s construction sector is showing signs of recovery as investors, developers, and government agencies focus on innovation and sustainability to counter rising costs and financing constraints.

The 8th edition of Big 5 Construct Kenya opened this week at Nairobi’s bringing together more than 150 exhibitors from over 20 countries, The three-day exhibition, running until November 7, showcases new construction technologies and sustainable solutions aimed at driving the country’s infrastructure and housing agenda under Vision 2030.

Industry leaders say the turnout reflects renewed investor confidence following a period of slow growth. Josine Heijmans, Senior Vice President at dmg Events, said the sector is shifting toward sustainable and tech-driven construction. “We’re seeing a move from traditional methods to prefabricated housing and smart building systems, which address efficiency, cost, and environmental challenges,” she said.

Despite the optimism, official data points to continued challenges. The Kenya National Bureau of Statistics (KNBS) Economic Survey 2025 shows the construction sector contracted by 0.7 percent in 2024, following a 3 percent expansion in 2023, The Construction Input Price Index rose from 119.05 points in Q1 2025 to 119.75 points in Q2, driven by higher prices of cement, steel, and quarry products.

Building plan approvals also dropped sharply, reflecting tighter credit conditions. KNBS data released in August show approvals fell to KSh 50 billion in Q1 2025, down from more than KSh 200 billion a year earlier. Developers cite high borrowing costs, expensive imports, and supply chain disruptions as key obstacles affecting project completion and affordability.

Still, analysts remain cautiously optimistic. Research firm GlobalData projects Kenya’s construction market to grow by 2.9 percent in real terms in 2025, supported by government infrastructure spending and the affordable housing programme. A report by Research and Markets forecasts the sector’s value could increase from KSh 956 billion in 2024 to KSh 1.4 trillion by 2029.

Rising urbanisation, a growing middle class, and the state-backed housing agenda targeting 500,000 new units by 2027 are expected to sustain demand. Meanwhile, renewable energy projects, digital design tools, and green building technologies are driving new investment across the built environment.

Exhibitors are showcasing innovations such as precast concrete systems, vibration-control technologies, and smart materials designed to enhance safety and reduce environmental impact.

As discussions continue around financing, policy reforms, and local material sourcing, stakeholders agree that innovation will be key to the sector’s long-term resilience. With government support and growing private-sector interest, Kenya’s construction industry is positioning itself as a regional hub for sustainable and technology-driven growth.