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Building sector gets boost as index edges up

Johannesburg - The FNB/BER building confidence index rose to 45 points in the third quarter of 2014, after falling to 41 in the second quarter, First National Bank said on Wednesday.

"The current level indicates that slightly more than half of the respondents are dissatisfied with prevailing business conditions," FNB economist John Loos said in a statement.

Although the index remained below the key 50 index point mark, the current index suggested that conditions in the building sector had improved in the quarter.

It was at 52 points in the first quarter of 2014, the first time since 2007 that it had been above 50.

In the third quarter, confidence of main contractors had risen to 53 index points, its highest level since the first quarter in 2008, Loos said.

This was primarily due to a marked increase in residential contractor confidence on the back of a sharp rise in residential building activity.

"This is encouraging as the residential building sector has been under significant pressure since the end of the housing boom in the mid-2000s."

He said sub-contractor confidence had also increased, led by the non-residential market.

The building sector as a whole seemed to have received a second wind, which was led by relatively strong growth in residential building activity. This boosted the rest of the sector's value chain, Loos said.

The field work for the third quarter survey was conducted between August 4 and September 1.

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