FNB/BER construction confidence index falls

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After hitting a 4 year high of 42 index points in 3Q 2012‚ the FNB/BER construction confidence index fell to 36 in 4Q 2012.

Construction activity slowed amid low levels of profitability and increased competition. Employment eased slightly‚ said BER/FNB.

Overall‚ the survey results suggest that the recovery in the construction sector - especially in activity - likely slowed during 4Q 2012.

The confidence index can vary between a maximum of 100 - which indicates that all respondents were satisfied with prevailing business conditions - and a minimum of zero - indicating that all respondents were unsatisfied.

A level of 50 indicates that the respondents are equally divided between those satisfied and dissatisfied. The current reading of 36‚ therefore‚ indicates that more than 6 out of 10 respondents were dissatisfied with prevailing business conditions during 4Q2012‚ BER said.

The outlook for 1Q 2013 is more positive with activity and profitability projected to rise. However‚ employment prospects are expected to deteriorate further.

“The slight drop in confidence suggests that the recovery in the construction sector recorded for most of the year moderated somewhat during 4Q2012. The recovery did not come to a complete standstill‚ but continued at a weaker tempo.

Increased margin pressure‚ low levels of profitability and a mild slowdown in construction activity growth were the main culprits behind the fall in confidence in 4Q2012. Prospects for 2013 are for continuing expansion‚ but at a relatively slow pace‚” FNB/BER said. - I-Net Bridge