SME BUILDING AND CONSTRUCTION INDUSTRY IN THE DOLDRUMS – CIDB SURVEY

The 2019 first quarter Construction Industry Development
Board (CIDB) small and medium-sized enterprise (SME) Business Conditions Survey, released
on Tuesday, suggests that the South African building and construction industry remains under
pressure.

General building confidence declined by
one index point to 33.

“Sentiment remains at a very depressing level as building activity growth slowed even
further,” says CIDB construction industry performance project manager Ntando
Skosana.

Grades 7 and 8 registered the sharpest drop in confidence in the newest
survey, dropping from 40 to an almost six-year low of 23.

“The marked deterioration in sentiment among general building class [businesses] in
grades 7 and 8 was largely driven by weaker activity growth,” says Skosana.

General building companies in the Western Cape, which previously
outperformed their provincial counterparts, have now also came under pressure.

“Despite a marginal uptick to 27 index points in the first quarter of
2019, building confidence in the Western Cape is still 30 index
points lower than at the end of 2017.”

After improving from a historical low of 27 to 35 in the previous
quarter, civil engineering confidence levels fell back
to 31 in the newest survey.

“This is alarming because at 31, close to 70% of respondents are
dissatisfied with prevailing business conditions. Like with
general building businesses, activity
growth just isn’t forthcoming,” comments Skosana.

Similar to general building businesses, the drop in
confidence was most pronounced among civil engineering businesses in Grades 7
and 8 where business confidence is now at 20
index points.

The other grades also registered marginal declines in sentiment.

On a provincial level, civil engineering businesses in the Eastern Cape and Western Cape experienced the sharpest
deterioration in sentiment in the newest survey, to zero and 27 index points
respectively.

The CIDB SME Business Conditions Survey is
conducted quarterly among grade 3 to 8 CIDB registered contractors, both for
general building and civil industries.

The main indicator used is business confidence, which indicates
whether respondents find the current business conditions
satisfactory.

A business confidence index can
vary between zero (indicating an extreme lack of confidence) and 100 (indicating
extreme confidence).

The 50-index-point mark is interpreted as neutral.

The fieldwork for the 2019 first quarter survey was conducted from January 28 to March 4.http://www.engineeringnews.co.za/article/sme-building-and-construction-industry-in-the-doldrums-says-cidb-survey-2019-04-09