Cement sales up 2.1%

Posted On Wednesday, 13 April 2005 02:00 Published by eProp Commercial Property News
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SA cement sales rose by only 2.1% year-on-year in March 2005 to 924,652 tons, but this is due to Easter falling in March this year

Construction IndustrySouth African cement sales rose by only 2.1% year-on-year (y/y) in March 2005 to 924,652 tons, but this is due to Easter falling in March this year, whereas in 2004 it fell in April.

If March sales are adjusted for working days, then the y/y increase was 12.3% y/y, which is similar to February's 12.1% y/y increase to 862,252 tons.

In 2005, Good Friday was on March 25, while in 2004 it was on April 9, in 2003 it was on April 23, but in 2002 it was on March 29.

In November 2004, South African cement sales surged by 26.1% y/y to a record 1,103,317 tons, but this slowed to a 7.8% y/y increase to 724,051 tons in December 2004 with a further easing to 7.1% y/y increase to 605,290 tons in January 2005.

The slow demand in December and January due to builders' holidays allowed the cement producers to restock their inventories ahead of the return of normal demand from February onwards.

Cement sales in South Africa rose by 17.4% in 2004 to a record 10.69 million tons compared with a 7.0% rise in 2003.

Exports however declined by 14.1% to 1.32 million tons after a 10% drop in 2003.

Total cement sales rose by 12.8% to 12 million tons, less than 15% short of nominal capacity of 13.5 million tons. Some cement producers have started expansions, but these are only expected to come into production in 2007.

Last year the Cement & Concrete Institute (CNCI) expected sales to grow between 5% and 8%, and this year sales growth is forecast at between 8% and 10%.

The real value of building plans passed in South Africa increased by 32.8% y/y to 31.947 billion constant 2000 rand in 2004, Statistics South Africa reported on Thursday.

The largest increase in the value of recorded building plans passed was reported for residential buildings (up 39.6% to 19.292 billion constant 2000 rand), followed by additions and alterations (up 27.6% to 8.178 billion constant 2000 rand) and non-residential buildings (up 17.0% to 4.478 billion constant 2000 rand).

The y/y rise in December slowed to 29.9% from 37.3% in November and the 2004 peak increase of 51.9% y/y set in August.

August's increase was the third month that the y/y increase exceeded 40%, beating March's 47.7% y/y and February's 40.7% y/y.

South Africa is currently experiencing a housing boom with South African house prices increasing by 32.6% y/y in December.

This brought the annual average increase to 32.1% for 2004 compared with 21.5% in 2003 according to South African commercial bank Absa's (ASA) monthly House Price Index (HPI).

November 2004 was the third consecutive month that South African cement volumes have exceeded one million tons in a month after this milestone was breached for the first time in June 2004. In June 2004, cement sales surged by 31.5% y/y to a then-record 1,002,377 tons.

In 2003 domestic cement sales grew by 7.0% to 9,105,466 tons after increasing by 5.9% to 8,511,851 tons in 2002 following only 1.8% growth in 2001.

For the first three months of 2005 compared with the same period in 2004, the percentage changes for the country and 11 regions were as follows: Free State 25.6%; Western Cape 15.5%; North West 12.5%; Southern KwaZulu-Natal 9.8%; Mpumalanga 9.8%; Gauteng 7.9%; National 6.8%; Limpopo 6.2%; Northern KwaZulu-Natal 3.4%; Border/Transkei -0.6%; Northern Cape -24.3% and Eastern Cape - 29.6%.

For 2004 compared with 2003, the percentage changes for the country and 11 regions were as follows: Eastern Cape 30.9%; Border/Transkei 25.8%; Western Cape 24.8%; Mpumalanga 19.5%; Gauteng 18.7%; National 17.4%; Northern KwaZulu-Natal 17.8%; Free State 15.1%; Limpopo Province 11.3%; Southern KwaZulu-Natal 10.2%; North West 7.6%; and Northern Cape 6.2%.


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