Stabilization of the construction industry continues
The construction index of Credit Suisse and the Swiss Association of Master Builders (SBC) starts 2016 with a sideways movement and loses one point to a new 129 index points. Expected seasonally adjusted sales for the 1st quarter of 2016 are in line with the previous quarter (-0.4%).
Both civil engineering (+0.6% compared to the previous quarter) and building construction (-1.4%) are relatively stable. In the latter, the decline was due to a renewed weakening of sales in commercial construction, writes Credit Suisse Economic Research. After the construction index has lost a total of 13 points since the 2nd quarter of 2014 from a high level, the experts expect less sharp swings for the current year.
A slump in construction activity is unlikely, he said, as the interest-rate-induced investment emergency continues to keep project planning for new space high, especially in Swiss rental housing, and the project pipeline in civil engineering is still well filled. At the same time, there was a lack of impetus for new record sales. In the real estate market, demand is increasingly unable to keep pace with supply and the economic situation remains "not very promising".
For 2016, Credit Suisse market observers expect only slightly higher gross domestic product (GDP) growth of 1.0%, accompanied by weak employment growth and an increase in unemployment to 3.7%. It will be more difficult for construction companies to maintain or even expand sales in such an environment, according to the assessment. Productivity increases, for example through the use of digital technologies, such as by means of BIM (Building Information Modeling), are in demand, it said. (mr)
