Construction industry: the situation is brightening
Last year, the Swiss construction industry suffered a significant drop in sales, but the trough appears to have been overcome in the second quarter of 2016. This is shown by the latest construction index published by Credit Suisse and the Swiss Association of Master Builders (SBA).
In the second quarter of 2016, the construction index showed a clear upward trend with an increase of 5 points. The expected seasonally adjusted sales of the main construction industry are thus significantly higher than in the previous quarter (+4.2%).
According to the SBC, the main reason for this development was civil engineering (+6.8%), which benefited strongly from individual larger orders. Building construction increased by 1.7 percent compared to the previous quarter; the reason for this was an increasingly strong demand in rental housing construction and numerous orders from the public sector.
Commercial construction and construction in tourist regions remains under pressure
By contrast, according to the Construction Index, commercial construction continues to decline, with demand impacted in the long term by various structural trends such as digitalization and offshoring.
The situation in the tourist regions also remains difficult; here the effects of the Second Homes Act are clearly noticeable.
Last year's interim low in construction activity is increasingly shifting towards the finishing trade (-2.6% compared with the previous quarter), which generates around two-thirds of total construction employment. The current recovery in building construction and civil engineering should also benefit the finishing sector with the usual delay, predicts the SBC.
The Swiss Construction Index is published jointly by Credit Suisse and SBC on a quarterly basis. It serves as an early indicator of construction activity in Switzerland by forecasting sales in the main construction sector for the current quarter. (ah)
