The City of Windhoek approved a total of 164 building plans in May, indicating a significant increase of 25.2% compared to the previous month, according to a recent report by IJG Securities.
However, despite this positive development, the approvals, valued at N$121 million, experienced a drop of 30.4% compared to the previous month’s N$173.4 million.
The overall construction activity in 2023 has been lacklustre, making it the slowest start in value terms since 2009.
On a year-to-date basis, a total of 725 building plans worth N$491.5 million have been approved, reflecting a decrease of 20.5% in number and 22.9% in value compared to the same period in 2022.
According to the IJG Securities report, “while May’s building plan approvals data was one of the better months so far this year, overall planned activity remains weak.”
The report highlighted a decline in the cumulative value of approved buildings over the past 12 months, totaling 2,280 buildings worth N$1.61 billion, representing a contraction of 3.2% in number and 10.0% in value compared to the previous year.
In addition, 37 building plans worth N$82.9 million were completed in May.
“The value of additions to properties approved in May reached its highest point this year, with 128 additions worth N$63.6 million. However, year-to-date, there has been an 8.8% decrease in the number of approved additions, totaling 540, and a significant 37.9% contraction in value compared to the corresponding period in 2022,” noted the IJG Securities report.
Regarding new residential units, May witnessed the approval of 31 units valued at N$55.3 million, surpassing the average monthly count for this year. This also marked the highest residential approval value since November 2022.
However, the cumulative figure for new residential unit approvals remained steady at 589, following ten consecutive months of contraction.
Year-to-date, 163 new residential units worth N$180.0 million have been approved, representing a 47.4% decrease in number and value compared to the same period in 2022. Additionally, only 22 residential units valued at N$15.58 million were completed in May, marking the lowest completion figure observed this year.
“The approval of 31 units valued at N$55.3 million in May shows a positive trend in new residential unit approvals, exceeding the average monthly count for this year,” stated the IJG Securities report.
The report also highlighted the slow start in construction activity in 2023, stating, “2023 is off to the slowest start in value terms since 2009, even before accounting for inflation”.
The Namibian Statistics Agency (NSA) released Q1 GDP data in May, revealing marginal quarter-on-quarter growth of 0.9% in the construction sector. This growth can be attributed to a 13.2% increase in government construction spending during the quarter.
“The Q1 GDP data revealed marginal quarter-on-quarter growth of 0.9% in the construction sector, which can be attributed to a 13.2% increase in government construction spending during the quarter,” said the report.
IJG notes that the 12-month cumulative value of approvals has consistently trended down in real terms for the majority of the last decade, this further emphasises the need for measures to stimulate the construction sector and promote economic growth.
“The consistent downward trend in the 12-month cumulative value of approvals indicates the need for measures to stimulate the construction sector and promote economic growth,” highlighted the IJG Securities report.
