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Johannesburg - South Africa is facing a recession in gross domestic fixed investment according to an expert, who says the decline in the number of building plans passed proves this.
On Wednesday, Statistics South Africa data showed that the real value of recorded building plans passed by larger municipalities (at constant prices) from January to September 2008 decreased by 14.9%, or R5.373bn, compared with the same period for 2007.
"Decreases were reported for residential buildings (-22.6% or -R4.4bn) and additions and alterations (-9.8% or -R925.5m). A slight increase of 0.2% (R14.3m) was reported for non-residential buildings," it said.
According to Investment Solutions economist Chris Hart, the building statistics reflect the state of domestic spending in the economy.
He said that the whole economy was "so focused" on what the government is doing, and not on private sector activities.
"We are actually facing a recession in gross domestic fixed investment; we can see it as big projects in the mining and building sectors are already being cancelled," he said.
-Fin24.com