Material prices dampen growth in the construction industry
Sales in the construction industry increased in the second quarter of 2022. However, the growth is put into perspective by higher material prices and transport costs. The industry is therefore still under pressure, as the construction index of Credit Suisse and the Swiss Builders' Association shows.
More is being built in Switzerland again: In the second quarter of 2022, sales in the main construction trades rose by around 6 percent year-on-year to CHF 6.1 billion. Incoming orders meanwhile increased by 12 percent to 6.4 billion Swiss francs. The figures come from the current construction index of Credit Suisse and the Swiss Builders' Association ( SBV ).
However, according to the report, the growth will be put into perspective by the “sharp price increases” for many building materials and a “significant increase” in energy and transport costs. For example, the prices of probation bars have risen by 87 percent and those of plastic pipes by 19 percent compared to the same quarter of the previous year. Meanwhile, diesel was around 45 percent more expensive in the second quarter of 2022 than a year ago.
Because sales have risen less than costs, the already low profit margin of 2 to 3 percent has now fallen even further, according to the report. In addition, the SBV expects the Swiss National Bank to raise interest rates further by the end of the year. As a result, sales in the main construction trades are likely to grow more slowly in the medium to long term. In the short term, the report assumes an 8.9 percent increase in sales in the third quarter of 2022 compared to the same quarter in the previous year.