Construction industry records good sales in first quarter

After the good construction year 2016, many things point to a consolidation at a high level in the current year. Sales in the main construction sector in the first quarter did rise by 7.2% to just under CHF 4 billion, with building construction (+10.2%) performing better than civil engineering (+4.1%). However, weather effects always play a major role in the first quarter, so the increase should not be overestimated. In the midlands, January was very cold, but there is little construction in January anyway. In the more decisive months of February and March, however, the weather was kind to construction companies, which probably more than compensated for the cold January.

Consolidation expected at a high level

Order intake decreased by 8.1% year-on-year. Order backlogs are also down. This indicates that the increase in sales in the first quarter was of a temporary nature and that consolidation at a high level is to be expected in the course of the year. Overall, the Swiss Association of Master Builders expects construction volumes in the current year to be similar to 2016.

Higher risks in the housing market in the long term

The fundamental factors for the construction industry, above all the low level of interest rates and the still respectable population growth despite the decline in net immigration, remain intact. However, the fact that for some years now more apartments have been built than the market can absorb is a cause for concern. The vacancy rate is rising accordingly. Although it is not yet at a critical level, the risks in the housing market are increasing in the medium to long term.

More information: Swiss Association of Master Builders