Kenya’s Construction Inflation Slows to 3.45% as Building Costs Decline in Third Quarter

The KNBS reported that the Construction Input Price Index (CIPI) fell from 126.36 in the second quarter to 125.45 in the third quarter, representing a 0.72 per cent quarter-on-quarter decline.

According to KNBS, the decrease was largely driven by lower prices for construction materials, transport, fuel, lubricants, and equipment, providing some relief to developers and contractors grappling with fluctuating building costs.

Data from the bureau shows that the materials index declined by 0.64 per cent, mainly due to reduced prices of metal doors and windows, paving blocks, locks and ironmongery, kerbs, timber and wood, as well as steel and reinforced bars. However, the prices of glass and glass putty, stones, tiles, and hardcore recorded increases during the period.

The equipment index also dropped by 0.49 per cent, attributed to lower costs of excavators, rollers, compressors, and vibrators. The cost of concrete mixers, however, registered a slight increase.

Cost of fuel, lubricants and construction labour in Kenya

Meanwhile, the transport, fuels and lubricants index posted the sharpest decline, falling by 2.80 per cent. KNBS attributed the drop to lower fuel, lubricant, and transport costs.

Labour costs bucked the general trend, rising marginally by 0.15 per cent during the quarter. Higher wages for masons, foremen, site agents, and skilled tradespeople such as carpenters and welders partly offset declines recorded among casual labourers, plumbers, electricians, and drivers.

The report further indicates that the Building Cost Index declined by 0.51 per cent, falling from 126.06 to 125.42, largely on account of lower transport, fuel, material, and equipment costs.

Similarly, the Civil Engineering Cost Index decreased by 0.92 per cent, from 127.30 in the second quarter to 126.13 in the third quarter. The decline was linked to reduced costs of transportation, fuel, materials, equipment, and labour.

The latest figures suggest that easing input costs, particularly for fuel and key construction materials, contributed significantly to moderating construction inflation in the third quarter of 2026, potentially offering a more favourable environment for ongoing and planned infrastructure and building projects.