BAK expects end of construction boom
The economic researchers at BAK Economics forecast a decline in building construction activity for the coming year. The construction boom of the recent past will not continue.
For the current year, BAK Economics still expects a new record level in its 2018-2024 building construction forecast. But in 2019, building construction activity will decline again for the first time since 2008, according to the economic researchers. In 2020 and 2021, too, only a restrained development is to be expected.
The main reason for this, he said, was residential construction, because on the one hand immigration is unlikely to return to its old record levels, and on the other hand interest rates are expected to rise gradually from the second half of 2019.
The pace of growth in building infrastructure is also slowing, even though numerous hospital construction projects are still in the planning stage. However, the strong growth of recent years has reduced some of the pent-up demand that had accumulated in this construction sector in the past.
In summary, BAK forecasts growth of 1.1 percent in 2018 and a decline of 0.9 percent in 2019. For the years 2020 to 2024, the economic researchers expect growth in building construction to average 0.3 percent per year. (ah)
