2014 a ‘tough year’ for construction companies

26 November 2014

Although the year had started off with a lot of promise, the 2014 financial year had proved to be a tough one for most construction companies, PwC partner Andries Rossouw said on Tuesday, Engineering News reports.

He said that, at the start of the year, construction companies had strong order books and their margins were recovering for the first time in five years; however, the lack of recovery in the economy counteracted this.

According to the PwC ‘SA Construction’ report, released on Tuesday, the 2014 market capitalisation (cap) of heavy construction and building materials and fixtures companies saw mixed results, with ten companies reflecting an increase and five reflecting a decline.

In aggregate, for the 16 companies analysed, the market cap had slightly decreased to R67.4-billion as at June 30, 2014, compared with R68.1-billion as at June 30, 2013.

The market cap of the 16 companies had decreased further after June 30 and, as at September 30, had declined to R66.3-billion, reflecting a 1.6% decline in market cap over the three-month period.

However, PwC said government’s National Development Plan and its continued commitment to public infrastructure investment of R847-billion over the next three years were positive signals for future growth in the industry.

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