Namibia’s construction industry is expected to further down due to the high-interest rates, this comes amid expectations that interest rates will increase by another 25bps if the Monetary Policy Committee (MPC) does not see monthly inflation data points moving closer to 6%.
Namibia’s construction industry is expected to further down due to high-interest rates, this comes amid expectations that interest rates will increase by another 25bps if the Monetary Policy Committee (MPC) does not see monthly inflation data points moving closer to 6%.
The building plan approvals declined in Windhoek by 53.5% y/y but rose sharply in Swakopmund by 110.0% y/y in January 2023. On a monthly basis, approvals declined by double digits in January 2023 for both Windhoek and Swakopmund. The value of approved plans totaled N$23.1 million in Windhoek compared to N$49.2 million in December 2022 and N$139.2 million in Swakopmund compared to N$53.8 million in December 2022. Approvals were mainly for additions and new residential properties in both Windhoek and Swakopmund, with only 3 commercial plans approved in Windhoek and none in Swakopmund.
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In addition to future activity, actual construction activity also remains on a declining path. Building completions declined in both Windhoek declined 20.2% y/y and Swakopmund by 10.6% y/y during January 2023. Building completions were mainly in the new residential and residential additions segment of the market in Windhoek, whereas new residential and commercial projects account for most of the completions in Swakopmund.
The Bank of Namibia has announced plans to come up with new policy measures to jump-start the construction sector which has experienced a significant slowdown in recent years.
