The recent boom in Balearic construction will not carry through to this winter.

14-09-2016

Activity in the Balearic construction sector is moderating. Climent Oliver, vice-president of the Balearic builders' association, suggests that this coming winter it will be similar to last winter and perhaps slightly less. This levelling-off comes after a period when the construction industry enjoyed a significant revival largely because of the amount of work in the hotel sector.

Oliver expects that new licences for hotel renovation will be granted but notes that incentives in the form of cheap credit for hotel businesses no longer apply. Because the tourism season has been so good, however, he believes that this will encourage investment.

In 2015 the level of investment for tourism construction was some 306 million euros. Over the past three years it has amounted to 585 million. Tourism minister Biel Barceló said earlier this summer that there are still redevelopment projects waiting to be activated and so anticipated a further two winters of building activity. Hence why Oliver is satisfied that new licences will be forthcoming.

Against this, however, there will be little activity in the retail and commercial sector because of the Council of Majorca's current moratorium on large commercial developments. This is due to be lifted in the summer next year. Oliver accepts that there will be no building of this type, something that has assisted the construction industry in recent years.

A further negative factor is the current state of the new housing market. It is all but "stagnant", says Oliver. In Palma, for example, there are hardly any new developments in the pipeline. This said, a decision in July to allow town halls to continue to issue licences for apartment buildings where there is no existing sewerage connection has been welcomed by the construction industry.

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