Category Archives: Building Plans

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.”

A total of 143 building plans were approved in April with a value of N$112.9 million, while 9 buildings with a value of N$26.7 million were completed. Thus far 2017 is off to a poor start, year to date 566 plans were approved while 76 were completed, the lowest number of plans approved and completed in the last twenty years. The year to date value of approved building plans currently stands at N$505.6 million, 32.4% lower than the corresponding period in 2016. On a twelve-month cumulative basis, 1694 building plans were approved worth approximately N$1.73 billion, 27.1% 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 453 additions to properties were approved with a value of N$274.9 million, 10.6% less in value terms than the corresponding period in 2016, but also 69 less additions in absolute terms.

New residential units were the second largest contributor to building plans approved: 100 residential units were approved year to date, 20 more than the corresponding period in 2016. In dollar terms, N$180.6 million worth of residential plans were approved, 2.0% higher than the corresponding period in 2016. It is encouraging to see that the slowdown has been less pronounced in the residential segment as there is still a lot of demand for middle and low income housing.

The number of commercial units approved in 2017 amounted to 13, valued at N$50.1 million. This compares to 31 units valued at N$263.4 million approved over the same period in 2016. On average over the last 20 years, 19.2 commercial units valued at N$157.6 million were approved in the first four months of the year, which would indicate that this is an especially slow year thus far.

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 1,694 building plans were approved, 23.8% less than the same measure for April 2016.

According to the Namibian Preliminary National accounts construction sector that recorded a decline in real value added of 29.5% for the year of 2016, which made it the largest detractor to economic growth. 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 has always been a large employer, and layoffs would have a negative effect on unemployment.

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.