News

Canada: Dwelling Permits Lowest in 3 Months

In July 2019 the dwelling permits were almost 42.800 units in Canada. This is 125,5% over the annual average and the lowest since April 2019. In comparison to the last 10 years the highest value was 50.402 units in May 2018 and the lowest value was 6.323 units in January 2009. Compared to the year before, the value has increased by 7,9% and compared to June,we have a decrease of the value by -2,3%. Based on this data, the B+L forecast for the current year leads to a yearly decline of -4,7%.

Czech Republic: Dwelling Permits up 1,8% Since June

In July 2019 the dwelling permits were almost 2.900 units in the Czech Republic. In comparison to the last 10 years the highest value was 4.222 units in May 2011 and the lowest value was 1.659 units in January 2015. Compared to the year before, the value has increased by 4,6% and compared to June, we have an increase of the value by 1,8%. Based on this data, the B+L forecast for the current year leads to a yearly growth rate of 1,9%.

Hungary: Non-residential Building Permits Highest in Almost a Year

In July 2019 the non-residential building permits were 462.742 m² in Hungary. This is 64,0% over the annual average and the highest since August 2018. In comparison to the last 10 years the highest value was 717.590 m² in August 2017 and the lowest value was 110.457 m² in January 2011. If we compare this to the year before, we can see that the value has increased by 36,3%, while compared to June, we have a value increase of 94,8%. Based on this data, the B+L forecast for the current year leads to a yearly decline of -9,4%.

USA: Dwelling permits up by 5,1% (Year-on-Year)

In July 2019 the dwelling permits were exactly 118.800 units in USA. In comparison to the last 10 years the highest value was 134.800 units in June 2015 and the lowest value was 36.280 units in January 2011. Compared to the year before, the value has increased by 5,1% and compared to June, we have an increase of the value by 7,0%. Based on this data, the B+L forecast for the current year leads to a yearly growth rate of 1,1%.

Australia: Dwelling Permits Up 0,5% Since June

In July 2019 the dwelling permits were exactly 14.265 units in Australia. In comparison to the last 10 years the highest value was 23.501 units in November 2017 and the lowest value was 7.431 units in January 2009. If we compare this to the year before, we can see that the value has decreased by -26,5%, while compared to June, the value has increased by 0,5%. Based on this data, the B+L forecast for the current year leads to a yearly decline of -15,9%.

Poland: Dwelling Permits Down -16,5% Since May

In June 2019 the dwelling permits were slightly above 22.500 units in Poland. In comparison to the last 10 years the highest value was 26.965 units in May 2019 and the lowest value was 8.063 units in January 2013. If we take a look at the year before, we can establish that the value has decreased by -0,4% while compared to May, we have a decrease of the value by -16,5%. Based on this data, the B+L forecast for the current year leads to a yearly decline of -2,1%.

Colombia: Dwelling Permits Down by -12,0% since May

In June 2019 the dwelling permits were slightly above 12.600 units in Colombia. In comparison to the last 10 years the highest value was 31.440 units in December 2015 and the lowest value was 6.662 units in January 2010. Compared to the year before, the value has increased by 22,6% and compared to May, we have a decrease of the value by -12,0%. Based on this data, the B+L forecast for the current year leads to a yearly growth rate of 8,8%.

Turkey - where is it going?

Construction development in Turkey is currently characterised by three negative factors and one positive factor. The positive factor is the state-financed construction program, e.g. in the infrastructure sector. However, construction participants report that the speed is currently being greatly reduced. In commercial construction, the lack of confidence in the future is the most important negative driver. This applies equally to both domestic and foreign investors. All are reluctant to expand capacity. In recent months, private residential construction and housing purchases have been characterised by extremely high interest rates of over 20% p.a.: Potential home buyers with sufficient equity capital currently receive around 20% interest on their capital and thus have no incentive to invest in real estate that is falling sharply in price. Potential home buyers with little equity had to pay over 20% interest rates, which non of them did anyway. Thus the housing market is currently in a Deadlock situation. This will probably lead to a high number of insolvencies among construction companies and project developers in the second half of the year. Our contacts in Turkey assume that a reduction in interest rates to below approx. 8% could lead to a reversal of the positive trend in the real estate market. The Turkish central bank took a first step in this direction on 25 July 19 by cutting its key interest rate from 24 to 19.75 percent. Now the impossible that happened a few months ago seems to be coming true. Large housing companies that have their business account at Halkbank pay only 0.79 percent interest per month. Thus the huge disaster in the Turkish real estate market could perhaps be averted at the last minute. We observe the development and adjust our building forecasts for Turkey every three months based on the current situation.

Industrial production worldwide

A look at industrial production also reveals differences between the USA, China and European countries. Industrial production in Europe and the EU is clearly declining, stagnating in China, but gaining considerable momentum in the USA. As we see in the graph the production in the mentioned countries decrease in a very similar atom beginning in mid of 2018. therefore be revise our forecast for the relevant building types like industrial and office buildings in these countries.

Strong growth in Asia until 2023 as an opportunity for the construction supply industry

Looking at the global development of construction volume by world region, growth in Asia (APAC region) over the past five years has been 3.4% per annum. This corresponds to a growth in construction volume of around EUR 550 billion. This growth is higher than the total construction volume in South America and Eastern Europe in 2018 combined. Similar growth is expected in this region over the next five years. As a result, global construction activity is shifting exeedingly towards Asia.

Ihr Ansprechpartner

Studien & Produkte

Robin Huth
T.: +49 228 62987-21
Email: RH@BL2020.com