The construction sector in Belgian experience a difficult year due to increasing demands for raw materials, supply chain disruptions and increased competition.
FREMONT, CA: In 2022, the construction sector in Belgium had a satisfactory performance, even though it had to face some obstacles like costly building materials and increased interest rates. Nonetheless, there are indications that the industry may experience a down-cut in 2023, as evidenced by a significant decrease in the number of permits for new housing, commercial properties, and renovation projects.
The Belgian Construction Sector is Still 3.4 per cent Below Pre-Covid Levels
During the last quarter of 2022, the construction industry in Belgian experienced a 2.4 per cent in growth compared to the same period in the previous year and a one per cent increase from the previous year. And a one per cent increase from the previous quarter, due to high levels of order and favourable weather conditions. However, despite this growth, the sector's activity was still 3.4 per cent lower than pre-pandemic levels, and it may take until 2025 for it to recover. This is in contrast to the Belgian economy as a whole, which had already exceeded pre-pandemic activity levels by 2.9 per cent in the fourth quarter of 2022.
Compared to its neighbouring countries, the construction sector in Belgium had a better performance last year. In France and Germany, the activity in the fourth quarter was even lower than in the same period in the previous year, with a decrease of 0.5 per cent and 0.7 per cent, respectively. The Netherlands experienced a growth rate of 1.5 per cent year-on-year, which is still lower than Belgium's growth rate. The reasons behind Belgium's strong performance include the reduction of value added tax (VAT) rate for demolition and reconstruction, the high demand for construction and renovations during the pandemic, and regional support for energy-efficient renovations.
