A total of 192 building plans were approved in March with a value of N$103.0 million, while 19 buildings with a value of N$40.7 million were completed. Thus far 2017 is off to a slow start, 423 plans were approved in the first two months while 67 were completed, the lowest number of plans in the last twenty years. The year to date value of approved building plans currently stands at N$529.4 million, 25.8% lower than the corresponding period in 2016. On a twelve-month cumulative basis, 1,740 building plans were approved worth approximately N$1.84 billion, 18.9% less than the preceding twelve-month period.
The largest portion of building plan approvals were made up of additions to properties, from both a number and value perspective. Year to date 340 additions to properties were approved with a value of N$221.1 million, 9.7% more in value terms than the corresponding period in 2016, but 21 less than the number of additions observed in the corresponding period in 2016.
New residential units were the second largest contributor to building plans approved: 74 residential units were approved year to date, 16 more than the corresponding period in 2016. In dollar terms, N$128.9 million worth of residential plans were approved, 20.6% higher than the first quarter of 2016.
The number of commercial units approved in 2017 amounted to 9, valued at N$42.7 million. This compares to 25 units valued at N$220.9 million approved over the same period in 2016. On average over the last 20 years, 14.5 commercial units valued at N$82.1 million were approved in the first quarter of the year.
The 12-month cumulative number of building plans approved has been steadily declining since its peak in September 2013. This figure has halved from the peak to lows last witnessed in 1991. In the last twelve months 1,740 building plans were approved, 22.3% less than the same measure for March 2016.
This decline is worrying as construction has been a major driver of growth in the last couple of years, and our overall GDP growth figures are likely to slow. Between 2010 and 2015 construction took centre stage in the Namibian economy and created a substantial base off which continued growth was always going to be a challenge, but the abrupt slowdown is likely to cause ripple effects in the economy.
As a leading indicator for economic activity in the country this implies that the whole economy could remain under pressure for the foreseeable future. With government spending on infrastructure slowing and the current economic environment making it increasingly difficult for banks to extend credit, we expect further contractions in the construction sector in 2017 and possibly beyond. This is cause for concern as the sector provides a substantial amount of jobs, on which many households depend.