JOSEPHINE OGUNDEJI x-rays the slow growth of the construction sector in 2022 due to inflation which has heavily impacted on building
x-rays the slow growth of the construction sector in 2022 due to inflation which has heavily impacted on buildinginflation rate surged to 21.47 per cent in November 2022, up from 20.47 per cent recorded in the previous month. This affected the costs of building materials such as reinforced concrete, sand, roofing sheet, tiles, cement, and granite, as their prices rose by over 80 per cent.
Despite the challenges, the nation’s construction sector contributed N12.9tn to the Gross Domestic Product as attested to in a recent report by the National Bureau of Statistics. The report showed that the construction sector contributed the amount in the first three quarters of 2022, indicating further that the sector contributed 9.5 per cent to nominal GDP in the third quarter of 2022. This was higher than the 9.26 per cent it contributed a year earlier and higher than the 7.
He said, “Growth has slowed in the sector, the massive inflation in Q1 has heavily impacted construction material prices and seriously hampered the ability of many developers to deliver projects on budget. “This has imperilled many projects and big players. The activities in the sector have been largely due to sizeable Diaspora investment in rental units, and the regular home buyers/builders who procure units over extended periods.
“The critical threat to the sector derives from the political/policy underpinnings of the macro-economic environment. Unless we implement policies that quickly deliver macro-economic stability, the sector will continue to suffer severe shocks in the New Year.”
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