Building Plans – May 2019

A total of 159 building plans were approved by the City of Windhoek in May, 11 less than in April. N$81.3 million worth of plans were approved in May as opposed to N$169.0 million in April. A total of 71 building plans were completed during the month with a value of N$142.5 million. Year-to-date, N$824.8 million worth of building plans have been approved, 26.1% more in value than during the corresponding period in 2018. On a twelve-month cumulative basis, 2,198 building plans have been approved worth approximately N$2.01 billion, 19.4% higher in value terms than cumulative approvals in May 2018.

116 additions to properties were approved in May with a value of N$34.1 million, a drop of 42.5% m/m and 54.5% y/y. Year-to-date 643 additions to properties have been approved with a total value of N$334.2 million, an increase of 8.8% y/y in number but a decrease of 25.2% y/y in value terms. On a 12-month cumulative basis the number of additions approved has increased by 4.4% y/y while declining by 29.7% y/y in value terms. We are seeing more additions to properties being approved but with a lower overall value being added.  Year-to-date 175 additions have been completed with a combined value of N$99.6 million, down 78.9% y/y in number and 60.1% y/y in value terms.

New residential units accounted for 42 of the approvals registered in May, an increase of 31.3% m/m and 13.5% y/y. In value terms, N$45.9 million worth of residential units were approved in May, up 36.0% m/m but down 7.7% y/y. Year-to-date residential unit approvals have increased by 22.6% y/y in number and 87.2% y/y in value. On a 12-month cumulative basis the rebound in residential units has been even more impressive, recording a 77.7% y/y increase in number of approvals and a 98.6% y/y increase in value. While the magnitude of the growth in number and value of approvals is largely due to base effects it is worth noting that, in value terms, one would have to go back to early 2014 to find a higher value for approvals of flats and houses, not adjusting for inflation. As building plan approvals are a leading indicator it points to increasing construction activity going forward, albeit in the residential space.

Only 1 new commercial unit, valued at N$1.3 million, was approved in May, bringing the year-to-date number of commercial and industrial approvals to 15, worth a total of N$169.7 million. This is 11.8% down in number from May last year, but 373.3% up in value terms. On a rolling 12-month basis the number of commercial and industrial approvals have slowed to 41 units worth N$514.1 million as at May. This is a decrease of 19.6% y/y in number but an increase of 182.7% y/y in value. Unlike the strong performance seen in residential approvals, the performance in value terms over last year in the commercial and industrial space is attributable to base effects. In nominal terms the value of commercial and industrial approvals is still less on a rolling 12-month basis than in any year after 2011. The value of industrial and commercial developments is thus also picking up when compared to last May last year.

In the last 12 months 2,198 building plans worth N$2.01 billion have been approved, increasing by 14.7% y/y in terms of number of approvals and 19.4% y/y in terms of value. The total value of plans approved is 22.9% down from the peak in March 2013, as seen in the above figure. Should we adjust this figure for inflation we see that the value of plans approved is down over 42% from the peak in April 2013. Thus, while cumulative approvals have been increasing in number and value terms when compared to a year ago, construction activity in the Windhoek municipal area is very much subdued by historical standards.

New Vehicle Sales – May 2019

A total of 1,055 new vehicles were sold in May, a 13.9% m/m increase from the 926 vehicles sold in April. Year-to-date, 4,346 vehicles have been sold of which 2,094 were passenger vehicles, 2,015 were light commercial vehicles, and 237 were medium and heavy commercial vehicles. On a twelve-month cumulative basis, new vehicle sales increased by 1.4% m/m to 11,559 new vehicles sold as at the end of May 2019. On an annual basis, twelve-month cumulative new vehicle sales continued on a downward trend, contracting by 5.0% from the 12,172 new vehicles sold over the comparable period a year ago.

512 New passenger vehicle sales were sold in May, an increased by 10.3% m/m and 39.1% y/y. Year-to-date, passenger vehicle sales rose to 2,094 units, reflecting lower cumulative sales than the preceding 8 years, and a 2.2% decline from the year-to-date figure recorded in May 2018. Twelve-month cumulative passenger vehicle sales rose 2.9% m/m, but continued to slide on an annual basis, contracting by 1.8% y/y.

A total of 543 new commercial vehicles were sold in May, 17.5% more than in April and 1.9% more than in May 2018. Of the 543 commercial vehicles sold in May, 472 were classified as light commercial vehicles, 13 as medium commercial vehicles and 58 as heavy or extra heavy commercial vehicles. On a twelve-month cumulative basis, light commercial vehicle sales dropped 8.9% y/y, while medium commercial vehicle sales rose 2.3% y/y, and heavy commercial vehicle sales rose by 9.0% y/y. Medium and heavy commercial vehicle sales seem to have quelled the downward trend on a twelve-month cumulative basis. Medium commercial vehicle sales have registered modest growth by this measure for 8 consecutive months now, while heavy commercial vehicle sales have posted growth for the first time since early 2016.

Volkswagen leads the passenger vehicle sales segment with 33.4% of the segment sales thus far in 2019. Toyota retained second place with 30.2% of the market-share as at the end of May. Kia, Hyundai, Mercedes round out the top selling brands in the segment with 5.2%, 4.8% and 4.7% market share year-to-date. This leaves the remaining 21.7% of the market to other brands.

Toyota remained the best-selling brand in the light commercial vehicle sales segment with 61.9% of the market share year-to-date. Ford drops to third place in the segment with 8.7% of the market share after being displaced by Nissan with 9.1% of the year-to-date sales. Hino leads the medium commercial vehicle segment with 40.3% of sales year-to-date, while Scania was number one in the heavy and extra-heavy commercial vehicle segment with 38.2 of the market share year-to-date.

The Bottom Line

Vehicle sales remain under pressure as is evident in the figures below. Year-to-date new vehicle sales in 2019 are currently below 2011 levels, reflective of depressed business and consumer confidence. Total new vehicle sales for the last 12 months is 49% down from peak levels seen in 2015.   Vehicle sales is a lagging economic indicator and thus tells us little about what to expect going forward, but illustrates the extent of the downturn we have been through thus far.