Behavior Description of Monetary and Fiscal Policy Factors That Impact Construction Output in Kenya for the Period 2000 – 2013
Emmanuel Thyaka Mbusi1, Moses Mitau Mulwa2
1Emmanuel Thyaka Mbusi, B Phil. Tech. Construction Management (UON), HDIP Valuation and Estate Management, Technical University of Kenya, Nairobi, Kenya.
2Moses Mitau Mulwa, M.A. Technical University of Kenya, Nairobi, Kenya.
Manuscript received on April 20, 2017. | Revised Manuscript received on April 27, 2017. | Manuscript published on March 05, 2017. | PP: 36-40 | Volume-7 Issue-2, May 2017. | Retrieval Number: B3003057217/2017©BEIESP
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©The Authors. Published By: Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/
Abstract: The main function of construction industry in the world is provision of physical and constructed facilities to give other activities space for taking place as seen in Hillebrandt, (2000). She further observes that, these physical and constructed facilities are referred to as construction output and are usually quantified in monetary terms. This quantification is done by Kenya National Bureau of Statistics in this country. Construction industry in Kenya mostly maintains a steady and an upward trend in its growth. Recently; 2013 and 2014, an economic survey report released by Kenya National Bureau of Statistics (KNBS) indicated that Kenya’s building and construction as having contributed 4.8% to the Gross Domestic Product (GDP). The GDP had risen from Kshs.4.73 trillion to Kshs.5.36 trillion in 2014 as Macharia, (2015) indicates. This gives a clear picture that the sector is growing, though at a little bit slow pace. Description of the behavior of monetary and fiscal policy factors in Kenya was thought of as a means of enlightening the construction sector stakeholders and players about their existence. The factors play a major role in decision making regarding construction projects anywhere in the world, but they are usually not accounted for keenly at this crucial stage of decision making. Time series data was collected from KNBS and CBK on quarterly basis for the period starting from 2000 up to 2013, for the five factors. These data showed varied behavior; some displayed upward trends while others showed a zigzag behavior. Conclusion was drawn that in Kenya, there are five monetary and fiscal policy factors that have influence on construction output and therefore policy makers, stakeholders and players in the construction sector should ensure a keen consideration of the factors during decision making stage. This will avert the problem of many construction projects stalling and ensure steady growth of the sector. This shall therefore contribute towards achieving the much taunted two digit growth of the country’s GDP.
Keywords: Construction output, fiscal policy, monetary policy, time series.