Construction World January 2020

T KH ͤUVW LV WKH TXDUWHUO\ $IULPDW Construction Index (ACI). This index is a composite of the level of activity in South Africa's building and construction sectors. The ACI saw an increase of 5,1% in the WKLUG TXDUWHU TXDUWHU RQ TXDUWHU 7KH $&, is compiled by Dr Roelof Botha on behalf of construction materials, industrial minerals and bulk commodities provider Afrimat. He maintains that there is still “some life in the construction sector” as the index has UHͥHFWHG LPSURYHG OHYHOV RI DFWLYLW\ VLQFH WKH ͤUVW TXDUWHU RI 7KH LPSURYHPHQWV are in the values of buildings completed, building plans passed and both the value and volume of building materials produced. The improvement has arrested the declining trend that started in the second quarter of 2017. Botha even calls this a ‘new growth phase’ that he says will gain momentum in 2020 as a result of the solid performance of capital formation growth over the last

two quarters. Despite a high interest rate that puts a damper on growth, pledges WR WKH YDOXH RI 5 ELOOLRQ ZHUH PDGH during the second Presidential Investment Summit in November. In addition, the new Infrastructure Fund, which will be managed by the Development Bank of Southern Africa, was also good news for the construction sector in 2020 and beyond. 7KH )XQG KDV DQ LGHQWLͤHG SURMHFW SLSHOLQH RI 5 ELOOLRQ Another indicator that the tide may be turning is the fact that the RMB/BER %XVLQHVV &RQͤGHQFH ,QGH[ %&, KDG LWV ͤUVW LPSURYHPHQW LQ WZR \HDUV ,Q WKH IRXUWK quarter of 2019, it rose to 26 after having dropped to 21 in the third quarter. This UHͥHFWV WKH UHVSRQVHV RI EXVLQHVV executives who were surveyed during the ͤUVW WKUHH ZHHNV RI 1RYHPEHU &RQͤGHQFH DPRQJ EXLOGLQJ FRQWUDFWRUV RQH RI WKH ͤYH VHFWRUV WKH %&, PRQLWRUV

LQFUHDVHG WR RXW RI LQ WKH IRXUWK quarter. This is still alarmingly low, but DQ LPSURYHPHQW IURP WKH LQ WKH WKLUG quarter. This improvement is mainly due to the slight residential building recovery (after three extremely weak quarters). 1RQ UHVLGHQWLDO FRQVWUXFWLRQ LV KRZHYHU still subdued. &RQͤGHQFH DOVR UHERXQGHG LQ WKH manufacturing and retail trade sectors, while WKHUH ZDV D GHFOLQH LQ ZKROHVDOH FRQͤGHQFH DQG PRWRU WUDGH FRQͤGHQFH RMB’s Chief Economist says although there was an overall improvement in the index, several quarters of improvement in sentiment “driven by a consistent recovery in underlying activity” is necessary to conclude that the Index has bottomed out.

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CONSTRUCTION WORLD JANUARY 2020