Only 566 and 76 building plans were approved and completed respectively in the first quarter of this year, marking the lowest number of plans approved and completed since 1991.
According to an IJG Securities report released this week, 143 building plans were approved in April with a value of N$112,9 million, while nine buildings with a value of N$26,7 million were completed.
The report further showed that the value of approved building plans from January to April stood at N$505,6 million, which is 32,4 percent lower than the corresponding period in 2016.
On a 12-month cumulative basis, 1,694 building plans were approved worth approximately N$1,73 billion, 27,1 percent less than the preceding 12-month period.
The largest portion of building plan approvals was made up of additions to properties, from both a number and value perspective.
Year to date, 453 additions to properties were approved with a value of N$274,9 million, 10,6 percent less in value terms than the corresponding period in 2016, but also 69 less additions in absolute terms.
New residential units were the second largest contributor to building plans approved, with 100 residential units approved from January to April, 20 more than the corresponding period in 2016.
“In dollar terms, N$180,6 million worth of residential plans were approved, two percent higher than the corresponding period in 2016,” IJG said in the report.
The analysts said it was encouraging to see that the slowdown in the sector had not affected the residential segment, as there was still a lot of demand for middle- and low-income housing.
IJG further noted that 13 commercial units valued at N$50,1 million were approved from January up to April, compared to 31 units valued at N$263,4 million approved over the same period in 2016.
On average, over the last 20 years, 19,2 commercial units valued at N$157,6 million were approved, in the first four months of the year, which would indicate that this year was an especially slow year thus far.
“The 12-month cumulative number of building plans approved has been steadily declining since its peak in September 2013. This figure has halved from the peak to lows last witnessed in 1991.
“In the last 12 months 1,694 building plans were approved, 23,8 percent less than the same measure for April 2016. According to the Namibian Preliminary National accounts, the construction sector recorded a decline in real value added of 29,5 percent for the year of 2016, which made it the largest detractor to economic growth.
“Between 2010 and 2015 construction took centre stage in the Namibian economy and created a substantial base, off which continued growth was always going to be a challenge, but the abrupt slowdown is likely to cause ripple effects in the economy.
“As a leading indicator for economic activity in the country, this implies that the whole economy could remain under pressure for the foreseeable future. With Government spending on infrastructure slowing and the current economic environment making it increasingly difficult for banks to extend credit, we expect further contractions in the construction sector in 2017 and possibly beyond.
“This is cause for concern, as the sector has always been a large employer, and lay-offs would have a negative effect on unemployment,” IJG concluded.