A total of 182 building plans were approved in May with a value of N$655.5 million, while 47 buildings with a value of N$25.1 million were completed. Although the number of plans approved remains relatively low, the value of plans approved saw a sharp increase, as N$501.2 million worth of commercial properties were approved in May. The year to date value of approved building plans currently stands at N$1.16 billion, 44.7% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1774 building plans were approved worth approximately N$2.33 billion, 13.1% higher than the preceding twelve-month period.
The majority of the number of building plan approvals were made up of additions to properties. 143 plans were approved in May. Year to date 596 additions to properties were approved with a value of N$359.2 million, 5.1% more in value terms than the corresponding period in 2016.
New residential units were the second largest contributor to building plans approved. 136 residential units were approved year to date, 46 more than the corresponding period in 2016. In dollar terms, N$250.6 million worth of residential plans were approved, 32.4% higher than the corresponding period in 2016. The increased activity in the residential sector has been quite a positive development given the current state of the Namibian construction industry.
The number of commercial units approved in 2017 amounted to 16, valued at N$551.3 million, of which 3 plans were approved in May with a combined value of N$ 501.2 million. This compares to 33 units valued at N$271.4 million approved over the same period in 2016. The approval of these large commercial properties is also a positive development due to the large number of people employed on these seemingly large projects.
Unfortunately, the longer-term trend remains quite negative. 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 1,774 building plans were approved, 16.7% less than the same measure for May 2016.
Although the month of May witnessed some encouraging developments such as the approval of large commercial properties along with decent number of plans in the residential sector, the construction industry is still struggling. The Construction Industries Federation (CIF) of Namibia claims that 63% of businesses have either closed, are dormant, or have scaled down operations drastically, while at least 30% of the construction workforce has already been retrenched. The CIF expects this situation to worsen if no new tenders are allotted by the end of June.
The abrupt slowdown in the construction sector has caused ripple effects in the economy. According to the CIF, “Retrenchments are being experienced across the entire supply chain. Not only the building and civil contractors, and subcontractors such as electricians, plumbers, flooring specialists, roofers, painters as well as air-condition technicians are affected. Architects, engineers, quantity surveyors as well as suppliers of building materials also needed to scale down operations, and make large-scale retrenchments. Similarly, manufacturers and suppliers of building material are also experiencing a serious downturn.”