Construction confidence increases above 50 in Q3
According to Engineering News, despite soft growth in the construction industry; the FNB Bureau of Economic Research Civil Confidence Index gained 11 points to 52 in Q3, 24 points higher than the first quarter of this year. This indicates that slightly more than half of respondents are satisfied with prevailing businessconditions. 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. 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. 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.