Improved confidence in the civil construction sector
CAPE TOWN - The FNB/BER Civil Confidence Index rose to 22 in the fourth quarter, the first time since the second quarter of 2017 that the index has risen above 20, indicating improved confidence in the civil construction sector, a statement from FNB senior economist Siphamandla Mkhwanazi said Monday.
The fourth quarter reading was also 7 points higher than in the third quarter of 2019.
While higher, the current index level still meant that a vast majority (close to 80 percent) of respondents are dissatisfied with prevailing business conditions, confidence had improved mainly due to a second consecutive uptick in activity.
“Respondents already reported a noticeable increase in activity during the third quarter. A further, and also noticeable, improvement was registered this quarter. In fact, the index measuring activity is now close to its long-term average,” said Mkhwanazi.
According to Statistics South Africa (Stats SA), the real value of expenditure on construction works contracted by 0.4 percent year-on-year in the third quarter of 2019, but he expects the FNB/BER Civil Confidence Index pointed toward an improvement in the fourth quarter.
“While activity was up, other indices - specifically those measuring tendering competition and the availability of new work - weighed on confidence,” he said.