A growing number of construction companies in Kenya are putting hiring plans on hold this year, citing rising operational costs and persistent cash flow challenges.
This is despite the government’s reliance on the construction sector to create jobs through initiatives like the affordable housing scheme.
According to a recent Central Bank of Kenya (CBK) survey conducted in May 2025, four out of five construction firms have no intention of employing additional workers this year.
About 80 percent of companies in the sector indicated they “probably won’t” or “definitely won’t” hire more staff compared to last year.
The report shows that no construction firm guaranteed increasing their workforce in 2025, with only 20 percent suggesting they might consider it.
Additionally, at least 40 percent of the companies firmly stated they would not add employees this year, underscoring a widespread reluctance to hire.
The CBK survey revealed that the hesitation to employ is driven by rising operational costs, increased taxes, and delayed payments from the government.
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Many businesses are struggling to maintain their current staff levels, let alone expand their teams.
This hiring freeze comes at a time when the government is depending on the construction sector to boost employment, especially through key national projects.
However, the CBK findings paint a challenging picture, with businesses facing tight cash flows and holding back on recruitment.
The Economic Survey 2025 also noted that the construction industry shed approximately 2,900 jobs last year, recording a 0.7 percent contraction in the sector.
The study further showed that other sectors like trade, manufacturing, and agriculture also have low hiring expectations.
About 61 percent of trade companies, 58 percent of agricultural firms, and 52 percent of manufacturers said they are unlikely to hire more workers in 2025.
Only 16 percent of agricultural companies, 15 percent of manufacturers, and 9 percent of trade businesses expressed certainty about increasing their staff this year.
In contrast, the hospitality industry remains slightly more optimistic, with 17 percent of businesses guaranteeing new hires, while 13 percent ruled out hiring altogether. The rest are undecided.
The hesitation by Kenya’s construction companies to expand their workforce presents a major challenge to the country’s employment growth plans.
With costs rising and cash flow tightening, the private sector appears to be on the defensive, which may slow down the government’s broader development and job creation goals in the near future.
