Construction confidence rises back above 50 in Q3
Despite soft growth in the construction industry, the First National Bank (FNB)/Bureau of Economic Research Civil Confidence Index gained 11 points to 52 in the third quarter, 24 points higher than the first quarter of this year.
This indicates that slightly more than half of respondents are satisfied with prevailing business conditions. The higher confidence was well supported by the underlying data, particularly in tendering price competition.
“The less keen tendering competition lifted profitability somewhat. However, it is important to note that tendering competition can ease owing to an increase in the number of tenders or a fall in the number of firms tendering or a combination of the two,” FNB senior industry analyst Jason Muscat said in a statement.
According to Statistics South Africa, growth in the real value of construction works slowed to 0.2% year-on-year in the second quarter, from 4.6% in the first quarter.
On a quarterly basis, construction work was up almost 8%. “The yearly result was somewhat weaker than what last quarter’s survey results suggested. Nonetheless, growth may continue in the third quarter.
“However, a robust quarterly recovery as seen in the second quarter is unlikely," Muscat highlighted.
Further, pressure on public sector capital expenditure as a result of fiscal concerns, paired with mining companies’ reluctance to embark on three costly capacity expansion projects, will weigh on construction activity over the medium term.
While growth in construction activity remained under pressure, respondents noted that the lack of demand for new work had been less of a business constraint.
“This possibly reflects some work coming through, likely from the renewable-energy sector. However, this may not be enough to support the entire industry,” Muscat warned.
Comments
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
Yale Lifting Solutions is a leading supplier of lifting and material handling equipment in Southern Africa. Yale offers a wide range of quality...
VISIT SHOWROOM
ENVASS is a customer and solutions-driven environmental consultancy with established divisions, serviced by highly qualified and experienced...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
