SBV: Construction industry still stable
Construction volumes remain satisfactory, but the outlook for the construction industry is gradually deteriorating. This is according to the latest construction index published by Credit Suisse and SBC.
In the fourth quarter of 2017, the Swiss Construction Index falls by two points to 145 points, announces the SBV Swiss Association of Master Builders. The expected seasonally adjusted sales of the main construction industry are thus one percent below the level of the previous quarter. This decline was due to civil engineering, which was 3.3 percent below the previous quarter, the SBC said. In contrast, the building construction index increased by 1.4 percent. Overall, sales in the main construction sector are likely to be slightly higher again in the current year compared with the previous year, the association predicts.
From the SBC's perspective, the signals for further development are mixed: The expected increase in GDP growth to 1.7 percent in 2018 should support construction activity and benefit demand for commercial space and residential property in particular. However, a positive economic trend also increases the possibility that the Swiss National Bank will take its first interest rate step upwards.
According to the SBC, it is "rather unlikely, but can no longer be ruled out entirely" that this will happen as early as the second half of 2018. Such an interest rate move could lead to corrections, especially in residential construction, which has increasingly decoupled from tenant demand. However, the well-filled order pipeline suggests that such a move would not have an impact before 2019.
