FNB BER construction confidence index slips

30 June 2014

A week after reporting a drop in confidence in South Africa’s building industry, the First National Bank Bureau for Economic Research civil construction confidence index has fallen the same number of points.

This means that close to 60% of surveyed index respondents are dissatisfied with prevailing business conditions, despite a “marked increase” in construction activity. This mirrors the nearly 60% of building sector companies surveyed that were dissatisfied with business conditions in the quarter.

Weaker private sector construction demand due to the prolonged platinum sector strike was a likely factor in the fall in confidence. Mining is a key driver of private sector construction work.

But the civil construction survey also indicated that construction work and profitability had improved in the quarter. “This is a direct result of the rise in construction work, as profit margins remained more or less unchanged,” Sizwe Nxedlana, chief economist at FNB, said.

By Mark Allix

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