An additional stimulus for economic expansion

According to the results of the IBR survey, investment optimism for new buildings has significantly increased, reaching its highest level since the survey began in 2011. The H1 2023 outcome indicates that 59% of businesses are planning to invest in new buildings in the coming year, which coincides with evidence from the gross fixed capital formation figures.This marks a significant increase in investment, with the share of fixed investment to GDP rising to 15.5% from 13% in 2021. However, this contradicts the relatively low levels of building plans passed for both residential and non-residential buildings.

Despite this, the potential for interest rates to peak and start declining through 2024 is the most obvious reason for optimism regarding new building activity. It is also important to note that such investment had collapsed in the aftermath of COVID-19, so the current increase could be a revival from a very low base.