Swiss construction industry stagnates in the first half of the year
Published: Wednesday, Aug 28th 2024, 10:20
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Swiss construction companies stagnated in terms of turnover in the first half of 2024. The improvement in civil engineering more or less offset the decline in building construction.
Overall, master builders generated a turnover of 11.0 billion Swiss francs, the same amount as in the same period of the previous year, as announced by the Swiss Federation of Master Builders (SBV) on Wednesday. Building construction fell by a total of 3.3 percent to 5.9 billion, while civil engineering rose by 3.9 percent to 5.1 billion.
Residential construction is still not picking up speed. The sector, which accounts for around a third of the total construction volume, recorded a decline in turnover of a good 3 percent in the first half of the year. Commercial construction, i.e. the construction of office or commercial space, was even less able to escape the sluggish construction sector. The decline here was 6 percent.
Population growth is nevertheless supporting the construction industry. Turnover increased in both public civil engineering (+3%) and public building construction (+1%). Private civil engineering (+5%) was also brisker than in the previous year.
The Master Builders Association sees a need to catch up in the area of public buildings. Infrastructure construction must meet the needs of the growing population for railways, roads, hospitals, schools and other public buildings.
Discrepancy between housing supply and demand
With regard to residential construction, the association has identified an unchanged wide gap between supply and demand. Residential construction slowed down in the second quarter compared to the first. The main reasons for this are the numerous objections and poorly implemented spatial design plans.
In the second quarter alone, sales in residential construction fell by 10 percent and new orders by 7 percent. The SBC expects a total of 40,000 new apartments to be built for the year as a whole, with a demand of at least 50,000. Depending on the municipality, vacancy rates have fallen once again or will remain at a very low level.
After all, planning applications for new apartments rose again in the first half of the year "after a long dry spell". However, this is unlikely to be reflected in higher construction activity until the second half of 2025 at the earliest. The approval rate is also still "exceptionally low".
For the year as a whole, the SBC is forecasting a decline in construction activity of 1.6% to a volume of around CHF 23 billion.
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