The number of building plans approved within the capital city, Windhoek municipal area by July 2017 contracted by 6.2% year-to-date (YTD) to 2050 units, compared to a contraction of 27.5% YTD in July 2016, as revealed by research firm, Simonis Storm Securities (SSS).
The firm this week in an analysis of the construction industry said, on a monthly basis, building plans approved contracted further by 31.5% compared to a growth of 8.1 percent in the prior month.
"Alongside, the number of buildings completed also contracted by 16.2% YTD to 354 units compared to a contraction of 41.7% YTD to date in July 2016. On a monthly basis, buildings completed rebounded by 94.7% after a contraction of 62% was recorded in the prior month," said SSS Economist, Frans Uusiku in a statement.
According to Uusiku, in monetary terms, the value of buildings completed continued to contract by 4.1% YTD to N$431.5 million in July 2017, compared to a contraction of 33.1% YTD in July last year.
Meanwhile, the country's statistics agency, NSA in their Revised Annual National Accounts statement released on Thursday, blamed the slump in the secondary industries, to the construction sector which recorded a decline in real value added of 26.5 percent in 2016 compared to a robust growth of 26% in 2015.
"The real value for construction works by general government slowed to 5.6 percent in 2016 from a growth of 31 percent recorded in 2015," NSA added.
Uusiku in his analysis further said that overall, although the notable contraction in the number of building plans approved and buildings completed to date has relatively improved from 12 months ago, the research firm believes that the recession in the construction sector may be longer than expected.
"This is because most construction activity that drove output in the past was government activity, construction on mines and roads, which have come to a standstill, as government revenue squeeze lingers," he added.