The Swiss construction industry is showing a mixed picture towards the end of the year: while residential construction continues to grow thanks to lower interest rates and high demand, commercial construction is stagnating. Despite economic uncertainties, builders expect construction activity to increase by almost 2% in 2026.



Despite the recent memorandum of understanding between the US and Switzerland on tariffs and foreign trade, economic uncertainty remains high. The commercial construction sector has been struggling for two years. Its turnover has fallen from CHF 0.8 billion to CHF 0.7 billion per quarter. According to the construction index, this slump is set to continue until 2026.

Swiss GDP is expected to grow by 0.9% next year, slower than in 2025 (1.2%), while the unemployment rate is likely to be higher (3.2% next year, 2.9% in 2025). Inflation is 0.2% in the current year. Forecasters' estimates for consumer price inflation next year range from 0.2% to 0.5%.

Residential construction: upturn to continue for another six to nine months

The residential construction sector, on the other hand, continues to grow. Since January 2025, its turnover has been CHF 6 billion (+7%). Higher asking rents and recent interest rate cuts are stimulating residential construction activity. The Swiss Contractors' Association expects 44,000 new apartments to be built in the current year.

The association expects the upturn to continue until the end of the second quarter of 2026. Factors that could prevent the boom from continuing beyond this point include persistently high construction costs, the recent decline in building applications, and the expected reduction in rents for existing apartments.

Construction activity expected to increase by 1.9% in 2026

Builders achieved sales of CHF 17.6 billion (+0.6%) in the first three quarters of 2025. Order intake even rose by 3.3% to CHF 17.9 billion. For 2025 as a whole, the construction index points to an increase in sales of 0.6%, and for 2026 even 1.9%.

Residential construction and civil engineering are driving growth. In public building construction, the signs are generally pointing to positive growth, but the sector has fluctuated sharply in recent quarters. Commercial construction is not providing any positive impetus.

Source: lignum.ch