JOHANNESBURG - Confidence in South Africa's building sector fell in the first quarter of 2019, with the building confidence index sponsored and compiled by First National Bank and the Bureau for Economic Research losing seven points to an almost eight-year low of 25.
The current level of the index indicated that 75 percent of respondents were dissatisfied with prevailing business conditions, FNB and the BER said.
“Building activity growth has been contracting for the past few quarters, so such a sharp decline – on top of that seen in previous quarters – was really detrimental for confidence,” FNB property economist Siphamandla Mkhwanazi said.
After staying above 40 during the second half of 2018, the confidence of manufacturers of building materials fell by 24 points to 19 in the first three months of this year, marking the single biggest decline in four years.
The only positive from this quarter’s survey results was an uptick in confidence among architects to 36, from 26 in Q4 2018.
"Overall, the building pipeline suggests that building activity growth will continue to be under pressure in the short to medium term,” Mkhwanazi said.
The FNB/BER building confidence index can vary between zero, indicating an extreme lack of confidence and 100, indicating extreme confidence.
It reveals the percentage of respondents that are satisfied with prevailing business conditions in ix sectors, namely architects, quantity surveyors, main contractors, sub-contractors (plumbers, electricians, carpenters and shop fitters), manufacturers of building materials (cement, bricks and glass) and retailers of building material and hardware.
It covers the whole pipeline from planning to the actual erection of buildings by main contractors and sub-contractors. The fieldwork for the first quarter survey was conducted between January 28 and March 4.
- African News Agency (ANA)