Data provided by McGregor BFA
All data is delayed
Loading...
See More

Building confidence rising – FNB/BER

Jun 18 2013 12:07
Scaffolding

One of two maintenance workers climbs through an opening in the glass to the safety of the building after he and his coworker were rescued by firefighters in New York. (AP)

Related Articles

Building confidence increases - FNB

New mall planned for Joburg CBD

Construction gains momentum

Construction sector 'needs accountability'

Construction cartels to learn their fate

Jordaan: FNB is in good hands

 
The FNB/BER building confidence index rose by four index points to a new four-year high of 41 in the second quarter this year.

The index is up from 37 index points in the first quarter.
 
According to the latest report, issued on Wednesday, this marks the highest reading of the index since 2008 and the first time since 2005 that the index has risen for three consecutive quarters.

However, the current level indicates that the majority (approximately 6 out of 10) of respondents in different sectors of the building industry still rate the prevailing business conditions as unsatisfactory.

Moreover, the rise in confidence across the different phases of the building sector indicates that the recovery is becoming more broad-based and therefore likely to be more sustained.

The confidence among main contractors jumped from 30 index points to 45. This marks the single biggest increase in the index since 2008 and places the current reading well above the long-term average of 36.

Building activity increased notably in the second quarter, contributing substantially to the jump in main contractor confidence.

This is in contrast to the first quarter when building activity also picked up nicely, but confidence remained flat.

The residential sector fared marginally better than the non-residential sector during the second quarter.

Although both sub-sectors saw higher confidence and an increase in building activity, the improvement was more pronounced for residential contractors.

“There are tentative signs that the recovery in the residential building sector may be more robust than previously thought,said Sizwe Nxedlana, FNB’s chief economist.

“However, it must be noted that this recovery comes off a very low base.”
 
Conversely, profit and tendering conditions in the non-residential sector were slightly more favourable than for residential contractors.

The rise in the building activity of main contractors led to an increase in the demand for building materials.

According to building manufacturers domestic sales and production picked up substantially during the second quarter.

This helped push their confidence to 27 index points, from 21 in the first quarter.

In contrast, the growth in retail sales of building materials slowed somewhat during the quarter.

This is likely due to this segment’s exposure to the struggling South African consumer and, in part, explains the fall in confidence of retailers of building materials from 59 to 46 points.
 
The building pipeline also continued to improve.

Architects’ confidence rose to 46 index points, while the confidence of quantity surveyors edged up by 4 points to 39.

Work, especially at the start of the building pipeline, increased significantly.

“The rise in architect and quantity surveyor confidence and activity, combined with the increase in general building activity provide reason to believe that the recovery in the building sector may be well supported going forward,” said Nxedlana.
 
The confidence of sub-contractors remained flat at 41 index points in the second quarter.
 
According to the latest report the results suggest that the pace of the building recovery likely quickened during the quarter, although off a low base.

However, there are still risks to the continued recovery in the sector.

Most of the risk stems from weak domestic and international economic conditions, which could thwart further growth in the building sector just as it starts gaining momentum.

 

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

fnb  |  ber  |  building confidence
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

Zuma: Booers are empty vessels

President Jacob Zuma has labelled people who boo at him "empty vessels who make the most noise".

 
 

Latest elections multimedia

DA won't get 30% - Zille
The EFF's ad was banned, see why
Why Jack Parow wants you to vote on 7 May
The ad the SABC doesn't want to air

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...