SURVEY CONFIRMS SA BUILDING, CONSTRUCTION INDUSTRY’S ‘WOEFUL STATE’

The Construction Industry Development Board’s
(CIDB’s) small and medium-sized enterprises (SME) conditions survey for the
second quarter has confirmed the “woeful state” of the South African building
and construction industry.

Building confidence decreased to 30 index points,
from 33 in the first quarter, particularly as building activity slowed even
further. CIDB construction industry performance project manager Ntando Skosana on Tuesday noted
that, “With the exception of a marginal uptick at the end of 2018, general
builder (GB) sentiment has trended downwards since the beginning of 2017”.

Across the grades, GBs in Grades 3 and 4
experienced the sharpest drop in sentiment – from 40 to 30 index points.

Although Grades 7 and 8 builders registered an
uptick in confidence, it was still relatively low at 29, as activity growth in
the segment remained under pressure.

Across the provinces, Gauteng was the only province
where GB confidence declined, from 44 to 19 index points.

However, according to Skosana, despite upticks in
the other provinces, confidence remained below the respective long-term
average.

She added that the building activity indicator
suggested that all provinces were experiencing a severe shortage of building
work, most notably in the Western Cape.

Civil Engineering (CE) confidence, meanwhile, fell
from an already depressed 31 index points, to an all-time low of 26, which was
“concerning” as it implied that nearly 75% of respondents were dissatisfied
with prevailing business conditions.

Overall, all the grades registered a decline in
confidence.

Similar to GBs, the drop was most pronounced among
CEs in Grades 3 and 4, where business confidence was now at 33 index points,
the survey found.

Across the provinces, the Western Cape was the
worst performer, with a drop in confidence to an all-time low of 18 index
points.

According to Skosana, the marked deterioration in
sentiment among CEs in the Western Cape was largely driven by weaker activity
growth.

Overall, the results of the CIDB’s SME business
conditions survey pointed towards a continued and broad-based weakness in
construction activity during the second quarter of the year.

“In addition to poor demand currently, there is no sign within the survey data to suggest that activity will improve over the short term,” Skosana concluded. https://www.engineeringnews.co.za/article/survey-confirms-south-african-building-construction-industrys-woeful-state-2019-07-23/rep_id:4136