Non-residential building sector booming

24/07/2008 15:00

The non-residential construction sector was booming last year. Companies also invested large amounts in repairs and renovation of non-residential buildings.

More new non-residential buildings

The production volume of new non-residential buildings grew by nearly 15 percent in 2007 relative to 2006. Investments in office buildings and factory halls grew in 2007 due to the booming economy. The public sector and education also invested more in new buildings.

Companies also invested more money in repairs and renovation of non-residential buildings. The volume of these investments was 7.7 percent higher than in 2006.

Production of new non-residential buildings, repairs and renovation

Production of new non-residential buildings, repairs and renovation

Commercial building sector easily affected by the economic situation

In 2007, there was a robust increase in new commercial buildings, while the increase in new dwellings diminished relative to the previous year. Higher profit margins and more demand induce construction companies to focus on non-residential building during a period of economic boom. When the economy is slackening, construction companies tend to build more houses. Due to the continuous demand, residential building is less easily affected by the prevailing economic situation than non-residential building.

GDP and construction of new dwellings and commercial buildings

GDP and construction of new dwellings and commercial buildings

More maintenance on non-residential buildings

The maintenance on non-residential buildings increased by 3.0 percent in 2007. Maintenance appears to be less affected by the economy than construction of new buildings, repairs and renovation. Maintenance costs are to a large extent determined by age, size and composition of the building stock. This also applies to the maintenance of dwellings.

Leslie Nootenboom and Maaike Zieleman