Construction and building material sales indicate strengthening economy
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THE IMPROVEMENT in the sales of construction and building material was encouraging amid the challenging economic environment, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) said yesterday.
Wholesale trade sales data released by Statistics South Africa showed a 31.3 percent increase in sales in May this year compared to May last year, to reach R158 billion.
Month on month, sales increased 6.3 percent from April. In the year to date, wholesale trade sales have increased by 14.5 percent.
Sales of construction and building materials increased to R13bn from R11bn in April, with expansionary year-on-year growth of 115.9 percent in May.
Within the metals and engineering (M&E) sector, the increase in the sale of construction and building material was driven mainly by the increase in the demand for building supplies across all segments, including non-ferrous metal products, basic iron and steel products, as well as other fabricated metal products.
Seifsa chief economist Chifipa Mhango said the figures were a sign that economic recovery in South Africa remained on track amid improved trading and industrial production activity.
He said, however, that the current unrest threatened to halt this progress, because it has disrupted supply chains across all sectors.
He said the government needed urgently to mobilise all its resources to ensure stability, to ensure that the economic recovery was not derailed.
“Our revised indications suggest that if the unrest continues further, production and sales of products within the M&E sector will be affected, as road freight transport, which is a core element of input supply, has been massively disrupted, thus negatively affecting the current positive trend in construction and building material sales,” he said.
BUSINESS REPORT ONLINE