BUILDINGS completed, measured in real terms, fell by -11 percent for the year-to-date (YTD) ending April 2021, compared to the same period last year, underpinned by the non-residential segment of the market, which has been hard-hit by the pandemic, Investec Bank economist Lara Hodes said yesterday.
Completions within the non-residential space declined by -52.2 percent y/y in the first four months of the year.
Conversely, residential completions were up 20.9 percent y/y over the same period, although this was buoyed by the unprecedented low base effect in April 2020.
This is further evidenced by the BER’s second quarter building survey, with confidence among residential sector builders up on first quarter 2021 levels.
“However, at just 30, confidence is still lacklustre, with 70 percent of respondents still dissatisfied with prevailing conditions. Constrained supply of building materials was highlighted as a key impediment to ’normal.’ Pipeline activity, as measured by building plans passed, was up 24.9 percent y/y for the YTD ending April, but again, base effects were primarily responsible for the outcome, she said. - Edward West
Sentiment amongst builders within the non-residential segment remains markedly subdued. A net 70% of survey respondents stressed that overall profitability was lower in Q2.21, than a year ago, with “a combination of continued keen tendering competition and rising input costs,” undermining profits.
Indeed, statistical base effects will continue to buoy readings in the short-term.
A timeous, wide-spread, efficient vaccination rollout is essential to place the economy on a path to sustainable recovery.