Pandemic delays recovery in Swiss building construction
Rising vacancies have caused a cyclical downturn in residential construction. The pandemic is also having a braking effect on building construction. BAK Economics determined this as part of the new construction forecast. The institute expects a recovery in the medium term.
Construction activity in building construction will be 3.1 percent lower this year than in the previous year, predicts BAK Economics in a statement on the current construction forecast by the economic research institute. A further decrease of 1.8 percent is expected in the coming year. As a justification, BAK Economics points to a year-on-year decrease in the number of projects under construction, building permits and building applications. “These indicators suggest that building construction is in a cyclical downturn,” the analysts explain.
They anticipate a downturn in all areas of building construction. However, due to its particularly high proportion, residential construction would play a special role, the press release said. Rising vacancies have led to a decrease in building permits since 2018.
On the other hand, operational construction is being slowed down by the effects of the pandemic, as this division covers construction projects from sectors particularly affected, such as tourism, explain the analysts. On the other hand, they attribute the downward trend in infrastructure construction to cyclical effects.
In the medium term, the analysts expect building construction activity to rise again in all sectors and regions. Weaker growth rates are forecast for residential construction than in the past. The analysts see good prospects due to the growing importance of transport and logistics for warehouse and hall construction. In regional terms, they attribute the greatest growth prospects to the Zurich / Aargau region and the Lake Geneva region.
