Modest recovery expected in construction

Out of the red, finally
Following eight years of being cemented in recession, the Bank of Namibia (BoN) expects the construction sector to register positive growth of 3.5% this year.
Jo-Maré Duddy
  • 3 Weeks Ago
The overall outlook for secondary industries in Namibia this year points to a significant improvement in growth, driven by stronger performances across the construction, electricity and water, and manufacturing sectors.

According to the Bank of Namibia’s (BoN) latest Economic Outlook Update, growth for secondary industries is expected to rise from 2.0% in 2023 to 4.3% this year, and remain stable in 2025.

The positive trajectory of these industries is largely attributed to the recovery in manufacturing, the resilience of the electricity and water sector, and the anticipated rebound in construction activity, the BoN says.



Construction

Following eight years of being cemented in recession, the BoN expects the construction sector to register positive growth of 3.5% this year.

The recovery is anticipated to continue next year, with estimated growth of 2025.

According to the BoN, the construction sector’s nominal contribution to Namibia’s gross domestic product this year should be nearly N$3.5 billion.

The BoN attributes the expected rebound largely to increased construction activities within the mining and electricity sectors, alongside several government fiscal projects.



Water, electricity

In parallel, the electricity and water sector, which saw robust growth last year, is set to maintain resilience, although at a slower pace.

The sector is expected to grow by 9.4% this year, followed by a more moderate 4.5% growth in 2025.

This performance is fuelled by increased inflows into the Ruacana hydro plant, boosting electricity generation throughout 2024, alongside ongoing investments and operational efficiencies that support its expansion.



Manufacturing

Meanwhile, the manufacturing sector, having contracted last year, is showing positive signs of recovery.

With expected growth rates of 3.0% in 2024 and 3.5% in 2025, the sector's resurgence is driven by rebounds in the beverages subsector, meat processing and grain milling.

The increase in beverage production, particularly soft drinks for domestic consumption, is one of the key factors contributing to this recovery.

Additionally, the grain mill products subsector is anticipated to perform strongly, with projected growth rates of 11.1% in 2024 and 5.7% in 2025, up from 4.3% in 2023.