Infrastructure boom in Windhoek
The City of Windhoek (CoW) accounted for 62.1% of the total value of completed buildings in the period January to May at N$239.1m whereas other local authorities accounted for 37.9% representing N$146.0m, Namibia Statistics Agency (NSA) monthly report shows.
The NSA report also shows that CoW index declined of 48.8% opposed to other local authorities which have recorded an increase in their index compared to May 2013.
“In May, the municipality of Walvis Bay recorded the highest index level of 373, followed by Ongwediva at 254. Swakopmund recorded the lowest index level of 90, an increase of 9.4% when compared to May 2013 and a decline of 17% when compared to April 2014,” the NSA report shows.
The NSA further noted the total value of buildings completed during the period January to May registered N$385m which was a decrease from the same period the previous year of N$ 518.3m and N$333.5m in the base year 2010.
“As such, the year to date value of plans approved is down 25.7% when compared to the levels seen in 2013,” NSA noted in part.
The composite building plan index for May 2014 stood at 137, down 23 index points when compared to the level seen in May 2013.
However, NSA notes that despite the 14.45 decline in the index when compared to last year, the index level is up notably on a month on month basis, by some 71.7%.
On their side, The Institute for Public Policy Research (IPPR) IJG Business Climate Index for the month of May attributed its upward move from a three month slump to the private sector credit extension to household and a pick up value of buildings plans completed in May to N$51m from a little over N$30m in the preceding month.
The IPPR IJG business Climate Index for the month of May increased by 3.9 points, following the minor 0.4 point contraction in the preceding month.
“The strong growth in private sector credit extension is largely driven by historically low interest rates as well as ever increasing house prices. In all likelihood, Namibia has now entered an interest rate hiking cycle following an increase in the repo rate in June, the first such increase since late 2007. As a result, credit extension growth can be expected to moderate over the next 12 to 18 months,” the IJG climate index reports.
The IJG Business climate report went on to stress that while private sector credit extension and building plans completed increased in May , company registrations, buildings plans passed and meat prices declined marginally, somewhat restricting the expansion of the index.
“The value of building plans passed, while a leading indicator tends to be volatile on account of the fact that individual large projects approved by the municipality can skew the overall figure. Additionally the reduction in company registrations, particularly CCs, is a move away from trend and is expected to once again pick up in coming months,” as stated in the business climate index report.
The IJG report added that, “the meat price index saw a decline, despite an increase in the average price of lamb, on account of a more than three percent decline in the average of beef price. This marks the third decline in the average price of beef in as many months. Given the drought experienced last year, and the beef price can be expected to recover towards the end of the year as supply shortage bites.”