Construction Sector Records 10.2% Growth in Second Quarter of 2023

The construction sector continues to play a pivotal role in the country’s economic recovery.

According to the August – September 2023 Economic Developments Report compiled by the Central Bank of Eswatini (CBE), the construction sector grew by 10.2%. This is an improvement considering that the sector had only grown by 5.0 percent in the previous quarter.

The report notes that supporting indicators on construction activity such as imports of construction material recorded positive growth of 7.6 percent in the second quarter of 2023.

“Ongoing mega projects that were implemented during the review quarter include, among others, the Lower Usuthu Smallholder Irrigation Project II Recent Economic Developments August/September 2023 3 (LUSIP II),  the International Convention Centre & Five Star Hotel (ICCFSH), construction of factory shells and Nhlangano-Sicunusa road. In addition, water supply grew by 5.4 percent in the second quarter of 2023 from a 19.7 percent contraction in the previous quarter, benefitting from increased treated water demand by the commercial category. On the contrary, electricity generation decreased to 22.9 percent in the quarter under review,” notes the report

Furthermore, credit extended to the private sector stood at E18.6 billion at the end of August 2023, depicting an expansion of 1.8 percent when compared to the previous month and 11.6 percent from the previous year.

According to the CBE report, the construction sector accounted for 4.3% of that credit.

Meanwhile, the August – September 2023 Economic Developments Report divulges that credit extended to households & and NPISH accelerated by 1.1 percent month-on-month and 3.3 percent year-on-year to close at E8.1 billion at the end of August 2023.

“Responsible for the increase were all components; other personal (unsecured) loans, motor vehicle loans, and mortgage loans. Hence, other personal (unsecured) loans grew by 2.0 percent to E3.1 billion, motor vehicle loans improved by 1.4 percent to E988.7 million, and mortgage loans rose by 0.4 percent to E4.1 billion.”

Worth noting is that the CBE Governor, Dr. Phil Mnisi stated during the last Monetary Policy Statement (21 September 2023) that they had noted an increase in credit extended to households. The Governor had attributed the increase in lending to the reduction of interest rates effected by the bank in July 2023.

Share With Friends