The construction sector recorded a massive decline of 43.7% in real value added during the third quarter of 2021 compared to a reduction of 10.4% registered in the corresponding quarter of 2020.
According to the latest update from the Namibia Statistics Agency (NSA), the gross domestic product (GDP) update for 2021 third quarter performance of the sector was reflected in the real value of government expenditure on construction that declined by 46.1% during the period under review compared to a growth of 3.7% in the corresponding quarter of 2020.
The real values of building plans completed also posted a huge decline of 67.7% during the third quarter of 2021 compared to a strong growth of 89.9% in the corresponding quarter of 2020. The update revealed the main contributors to the decline of 67.7% is the residential and commercial buildings.
The domestic economy performance remains optimistic in the third quarter of 2021, recording a positive growth of 2.4% during the third quarter of 2021 compared to a decline of 12.3% recorded in the corresponding quarter of 2020.
NSA CEO Alex Shimuafeni stated that in nominal terms, GDP stood at N$45 billion in the quarter under review relative to the N$44 billion posted in the same quarter of 2020. This shows that the size of the economy increased by N$1.1 billion year on year.
“The expansion of economic activities in the third quarter of 2021 was observed in almost all the
sectors of the economy. Double digit growth rates were registered in mining and quarrying and hotels and restaurants sectors that recorded growths of 41.9% and 19.5% in real value added, respectively. Furthermore, sectors such as health, agriculture and forestry, transport and storage and real estate and professional service posted strong growths in value added of 7.3%, 5.9%, 5.6%, and 4.2%, accordingly,” said Shimuafeni.
However, poor performance was observed in the secondary and some tertiary industries of the economy. The financial services sector followed the construction sector with reductions in growth registering a reduction of 10.9% in real value added. Similarly, manufacturing and wholesale and retail trade sectors posted declines of 2.6% and 0.7%, respectively.
The financial services activities sector of the economy continued to be depressed and trapped in the negative trajectory for the seventh consecutive quarter.
“This is relative to a steeper contraction of 16.1% in real value added recorded in the corresponding quarter of 2020. The poor performance of the sector is associated with banking subsector that recorded a decline of 19.2% from a reduction of 5.9% recorded in the corresponding quarter of 2020,” reads the report.
Moreover, the insurance subsector declined by 1.1% during the quarter under review. NSA noted the recent global and domestic downswing of economic activities continue to shrink total deposits in the economy due to reduced broad money deposits as well as non-broad money deposits.