Maihapa Ndjavera
WINDHOEK – Activity in the construction sector, which is an excellent barometer of economic strength, started with a gradual recovery during the third quarter of 2019. The pickup in the construction sector was mainly driven by a strong rise in the government construction works.
According to the Bank of Namibia (BoN), construction activity increased, year-on-year, during the third quarter as government expenditure on public construction programmes increased in real terms by 42.4 percent and 4.5 percent year-on-year and quarter-on-quarter, respectively, to N$707.4 million during the third quarter of 2019.
In its Quarterly Bulletin, BoN stated that the real value of buildings completed increased but noted that the real value of building plans approved, which is a leading indicator for future construction activity, actually decreased.
“The real value of buildings completed increased by 3.7 percent and 18.9 percent, year-on-year and quarter-on-quarter, respectively, to N$368.6 million over the same period. The real value of building plans approved, which is a leading indicator for future construction activity, decreased year-on-year during the quarter under review. The real value of building plans approved decreased year-on-year by 15.4 percent, but rose by 14.4 percent quarter-on-quarter to N$559.0 million,” read BoN’s report.
Meanwhile, the central bank stated that manufacturing in the country decreased during the third quarter of 2019, based on the composite production volume index for the manufacturing sector (PVIM) which decreased both on a yearly and quarterly basis, driven mainly by reduced blister copper and diamond processing.
The PVIM decreased by 14.7 percent and 33.2 percent year-on-year and quarter-on-quarter, respectively. Hence, after excluding the mineral processing subsector, the index increased substantially by 46.3 percent and 30.5 percent year-on-year and quarter-on-quarter, respectively.
BoN explained that the rise was driven by the increase in fabricated metals and an increase in the production of cement stemming from a new cement factory that started with production in May 2019. The bank said the production of blister copper and diamond processing declined, while that of refined zinc and cement increased year-on-year during the quarter under review.
“The production of blister copper decreased substantially by 37.6 percent and 30.8 percent year-on-year and quarter-on-quarter, respectively, up to the third quarter of 2019. The year-on-year increase was attributed to plant maintenance carried out during the quarter under review. Similarly, the diamond processing activity decreased by 14.1 percent and 40.8 percent year-on-year and quarter-on-quarter, respectively, over the same period. This was largely due to oversupply of polished diamonds that led to steep price drops.”