The Swiss construction industry is expected to record marginal growth between 2019 and 2023, supported by investment in commercial, institutional, residential, and renewable energy projects, according to GlobalData.
GlobalData’s latest report ‘Construction in Switzerland – Key Trends and Opportunities to 2023’ reveals that, to reduce traffic congestion in the country, the Swiss Government is focusing on the development of road and rail transport infrastructure. For the expansion of the road network, the government plans to spend CHF16 billion (US$16.5 billion) during the period of 2018 – 2028. In 2018, the government also launched the new Motorway and Agglomeration Traffic Fund to finance road development works across the country.
“The Swiss construction industry expanded by 1.4%, in real terms, in 2018, with the industry’s output value – measured at constant 2017 US dollar exchange rates – increasing from US$78.9 billion in 2017, to US$80 billion in 2018. This was preceded by annual growth of 1.3% in 2017, 1.6% in 2016, and 0.1% in 2015,” said Danny Richards, Lead Economist at GlobalData. “Slow growth can be attributed to the sluggish economic expansion during the period of 2015 – 2017, coupled with low global commodity demand, although the government’s investment in infrastructure, energy, and institutional construction projects provided support to the construction industry to remain positive.”
The industry’s output value, in real terms, is expected to rise at a compound annual growth rate (CAGR) of 1.51% over the forecast period. The industry is consequently expected to rise from a value of US$80 billion in 2018 to US$86.2 billion in 2023, measured at constant 2017 US dollar exchange rates.
“Accounting for 33.6% of the industry’s total value in 2018, residential construction was the largest market in the Swiss construction industry during the review period,” continued Richards. “The market is expected to retain its position over the forecast period, driven by the growing population and ongoing urbanisation. Low mortgage interest rates are also expected to support market growth over the forecast period.”
Commercial construction accounted for 19.8% of the industry’s total output in 2018, followed by infrastructure construction with 19.4%, industrial construction with 9.5%, energy and utilities construction with 9.2%, and institutional construction with 8.6%.
“The total construction project pipeline in Switzerland, including all mega projects with a value above US$25 million, stands at CHF48.3 billion (US$49.4 billion),” said Richards. “The pipeline, which includes all projects from pre-planning to execution, is dominated by late stage projects, with 84.4% of the pipeline value being in projects in the pre-execution and execution stages as of September 2019.”
Read the article online at: https://www.worldcement.com/europe-cis/09102019/swiss-government-focuses-on-road-and-rail-projects/