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Johannesburg - The civil construction industry recovered
somewhat in the fourth quarter of 2011, but is still struggling, according to
the latest FNB/BER civil construction confidence index released on Tuesday.
The index increased from 21 in the third quarter of 2011 to
26 in the final quarter.
"(A) reading of 26 indicates that three-quarters of
respondents remained dissatisfied with prevailing business conditions,"
First National Bank chief economist Cees Bruggemans said in a statement.
The 5 index point increase brought confidence back to the
same level it was a year ago.
An index reading of 100 shows that all respondents are
satisfied with prevailing business conditions, while zero shows all respondents
are unsatisfied.
The index shows that construction activity recorded its
biggest improvement in 18 months, but work was still scarce, Bruggemans said.
"As a result, tendering competition remained fierce and
profitability subdued."
Among respondents, 83% indicated that an
insufficient demand for construction work hampered their business.
Construction activity was boosted by Transnet's new
multi-product pipeline. However, Eskom was now spending more on machinery and
equipment than on construction.
Bruggemans said provincial and local governments continued
to spend on road and water projects.
"Expenditure on road projects would have been higher
were it not for the shortage of bitumen that halted a number of projects,"
he said.
The private sector continued to spend on construction works
to sustain mining capacity. This recovery in activity led to employment
declining at its slowest pace in two years.
