Summary

The Swiss construction industry expanded by 1.4% in real terms in 2018; this was preceded by annual growth of 1.3% in 2017, 1.6% in 2016 and 0.1% in 2015. Slow growth can be attributed to the sluggish economic expansion during the period of 2015-2017, coupled with low global commodity demand, although the government’s investment in infrastructure, energy and institutional construction projects provided support to the construction industry to remain positive.

The industry is expected to record marginal growth over the forecast period (2019-2023), supported by investment in commercial, institutional, residential and renewable energy projects. To reduce traffic congestion in the country, the government is focusing on the development of road and rail transport infrastructure. For the expansion of the road network, the government plans to spend CHF16 billion (US$16.5 billion) during the period of 2018-2028. In 2018, the government also launched the new Motorway and Agglomeration Traffic Fund to finance road development works across the country.

In October 2018, the government increased the package of Switzerland’s railway network (2018-2035) by 3.5%, going from CHF11.5 billion (US$11.9 billion) to CHF11.9 billion (US$12.2 billion) for the period of 2018-2035. The government is also spending CHF13.2 billion (US$13.4 billion) on the maintenance of railway infrastructure during the period of 2017-2020.

The industry’s output value in real terms is expected to rise at a CAGR of 1.51% over the forecast period.

Key Highlights

- GlobalData expects the infrastructure construction market to record a forecast-period CAGR of 1.54% in nominal terms in 2023, driven by the government’s plan to develop the country’s transport infrastructure. In June 2019, the parliament approved an investment package of CHF12.9 billion (US$13.2 billion) to develop and expand the country’s railway infrastructure.

- Institutional construction market’s forecast-period growth will be driven by the government’s focus on the education sector. In the 2019 budget, the government increased its total expenditure on education and research by 2.4%, going from CHF7.8 billion (US$8 billion) in 2018 to CHF8 billion (US$8.2 billion) in 2019. Furthermore, the government is planning to allocate CHF8.1 billion (US$8.3 billion) for education and research in the 2020 budget.

- Forecast-period growth in the energy and utilities construction market will be driven by the government’s focus on providing internet connection speed of up to 80Mbps to the 90% of the population and at least 50Mbps to the 96% of the population by 2021. In addition, it aims to provide internet speeds of up to 200Mbps to the 40% of the homes and offices across the country by 2021. To meet this target, the government is expanding its fiber optical coverage across the country with an expected investment of CHF1.6 billion (US$1.6 billion) annually during the period of 2019-2021.

- With an aim to provide sustainable energy supply, the government is focusing on the modernization and development of transmission grids across the country. Under the Strategic Grid 2025, the government plans to build 124km of new transmission line between Chippis to Lavorgo with a capacity of 380kv by 2024. The government also plans to build an 87km-long transmission grid between Mettlen and Ulrichen and a 40km-long transmission line between Beznau and Mettlen with capacity of 380kv by 2025.

- The total construction project pipeline in Switzerland - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at CHF48.3 billion (US$49.4 billion). The pipeline, which includes all projects from pre-planning to execution, is dominated by late stage projects, with 84.4% of the pipeline value being in projects in the pre-execution and execution stages as of September 2019.

GlobalData’s Construction in Switzerland - Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Swiss construction industry, including -
- The Swiss construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Swiss construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Switzerland. It provides -
- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Switzerland, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants

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- Assess business risks, including cost, regulatory and competitive pressures.
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