Construction industry: sales up but outlook gloomy
In the first half of 2017, the Swiss main construction industry increased its sales by six percent compared with the previous year. However, the outlook is deteriorating: For the first time in many years, the number of building permits is falling.
In the first six months, the main construction industry generated sales of CHF 9.5 billion, 6.2 percent more than in the previous year. This was mainly due to civil engineering, according to the latest quarterly statistics published by the Swiss Association of Master Builders (SBA).
For the second half of the year, SBC anticipates a "rather unspectacular development", with sales in all likelihood remaining in line with the previous year.
Building construction: prospects darken
In the medium term, however, sales in the building construction sector are likely to decline, the SBC predicts. This is indicated in particular by building permits: In the first seven months of 2017, the approved construction volume fell by more than ten percent compared to the previous year. Previously, it had been stable for years, although demand declined due to lower population growth.
The result, he said, was that more was built than was in demand, and the vacancy rate rose. "Due to a lack of alternatives, investments in real estate, especially in rental apartments, were nevertheless attractive. Meanwhile, this no longer seems to be the case without reservation," SBC wrote in a statement. Planning is adapting to demand, it adds.
This is also shown by the fact that only slightly fewer apartments are being planned, but the volume per apartment is decreasing. Smaller, less expensive apartments are being built. SBC expects sales in building construction to decline in the coming year.
