Slowdown dents building sector's confidence

Posted On Thursday, 19 April 2007 02:00 Published by
Rate this item
(0 votes)

The building confidence index has dropped by two points amid a general slowdown in construction activity, says First National Bank (FNB) chief economist Cees Bruggemans.

Construction IndustryThe bank's index declined marginally to 87 points this year from 89 points last year.

Bruggemans said the decline in business confidence was due to a moderation in all building industry categories, except quantity surveyors, where confidence increased by six index points.

Residential property development was taking a hard knock while commercial property was experiencing a boom.

However, the Bureau for Economic Research's latest survey found that business confidence of nonresidential building contractors had increased marginally from 93 index points last year to 94 points this year.

John Loos, property strategist with FNB Commercial Property Finance, said the high level of retail building activity was still taking place in "lagged" response to SA's consumer boom. Low vacancy rates were driving growth in industrial and office space property categories.

According to the Investment Property Databank, overall commercial property returns were still strong at 27,4%, which created the right climate for strong investment and growth.

While the overall profitability of building contractors had improved, shortages in skilled labour and building materials were affecting output.

Bruggemans said overall business confidence in the building industry remained comparatively high, with major industry players satisfied with conditions.

He said business confidence of residential building contractors was down from 89 to 84 points, because conditions in this sector had become less favourable compared with 2005 when growth was strong.

On the supply side, developers were increasingly encountering problems in getting municipal approval, and connection to water supply and sewage disposal, as a result of strained municipal infrastructure.

 

Last modified on Wednesday, 16 October 2013 21:29

Most Popular

Grit Real Estate financial results for the year-ended 30 June 2019

Sep 30, 2019
 BRONWNY CORBETT
London Stock Exchange listed Grit, the only listed Africa-focused income distribution…

Concor builds world class data centre for Orange Botswana

Sep 30, 2019
 ORANGE 1
Construction of the new Data Centre for Orange Botswana is well underway, with this fast…

Abland making good progress on R2bn smart precinct in Pretoria

Sep 30, 2019
 IRENE LINK
Abland, one of South Africa’s leading property developers for over 30 years, together…

National Housing Awards Contract for Crested Towers Property Management to Broll Uganda

Oct 03, 2019
 NHCC BROLL
Broll Property Group has added another high-profile client to their books by winning the…

Atterbury begins development of R6bn Castle Gate precinct in Pretoria

Oct 04, 2019
 CASTE GATE 1
Atterbury has commenced construction of the first phase of the prime new multi-billion…

Please publish modules in offcanvas position.