08-02-2015Archive

Recovery of Majorca’s construction industry started two years ago and in 2015 there was a notable increase in the number of new homes being built. In the first ten months the number of projects more than doubled from 441 to 917.

The majority of these (65%), either completed or ongoing, were for houses. Development of apartment blocks, on the other hand, was far less evident, principally because of a lack of building land in Palma, where the greatest demand exists, and also because of financial constraints that developers continued to face in wishing to start new projects.

Housing rehabilitation was also on the increase, even if this is often more costly than new building because of the complexity it entails. Up to October last year there were 175 renovation projects, whereas in the 2014 there had been 102.

The combination of new building and renovation resulted in a 90% increase in investment for the first ten months of the year and represented a rise from 209 million euros in 2014 to almost 400 million, which was more than half the total investment in private construction.

Investment in tourist and non-residential projects brought this total to 650 million euros, itself an increase of almost 80%.
The spending on tourist accommodation, which was one of the first to revive following economic crisis, was up to 184 million from 103 million in 2015.

Employment has benefited from this revived construction activity. The sector had been one of the most badly affected by economic crisis, but by the start of November last year there were over 42,000 working in construction (employed and self-employed), a figure that had begun to rise two years ago, albeit that it remains well below the 2007 figure.

Manuel Gómez, the director of the builders’ association in the Balearics, says that there is still not enough work for everyone, meaning that those who are hired are on lower wages than had once been the case. Businesses have, in addition to lower labour costs, adjusted other costs in order to be able to secure building projects.

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