THE A20m takeout of minorities in SA construction group Aveng's Australian subsidiary McConnell Dowell moved a step closer to conclusion at the end of last week when a requisite body of shareholders backed the plan, Aveng said on Friday.

Tuesday, 18 March 2003 02:00

Construction sees good growth

The construction sector is confident that it will again experience good growth this year after a brisk last year that saw the sector expanding by 5.32%.

Construction IndustryGovernment will spend about R50-billion on construction projects over the next three years. This represents real growth of 12% a year for the sector, says Carl Grim, CEO of Aveng, SA's largest construction company.

The federation of civil engineering contractors is equally upbeat, expecting nominal turnover from civil engineering alone to rise from about R16-billion last year to R20-billion this year.

Optimism in the sector stems from the expected decline in inflation and interest rates, together with the recovery of the rand against the major currencies and other factors.

SA's economy is expected to continue expanding at a rate of 3% a year. "This growth would in part be brought about by government expenditure as well as private investment, which will support growth in gross fixed capital formation," says the federation's Pierre Blaauw.

"Prudent finances have culminated in a declining budget deficit which, coupled with government's focus on infrastructure development, holds great promise for the civil industry," Blaauw says.

Federation members were encouraged by increased tender activity in the latter part of last year. However, Blaauw says underspending due to institutional capacity problems is still preventing the full benefit of rising government capital expenditure from trickling down to the industry.

The industry is planning a summit at which some of these issues will be discussed. Meanwhile, some construction analysts have said that SA's rate of capital expenditure is still not high enough to catch up on the country's R170-billion social and economic infrastructure backlog.

 

THE construction sector is confident that it will again experience good growth this year after a brisk last year that saw the sector expanding by 5,32%.

Construction IndustryGovernment will spend about R50bn on construction projects over the next three years. This represents real growth of 12% a year for the sector, says Carl Grim, CEO of Aveng, SA's largest construction company. The federation ofcivil engineering contractors is equally upbeat, expecting nominal turn over from civil engineering alone to rise from about R16bn last year to R20bn this year.

Optimism in the sector stems from the expected decline in inflation and
interest rates, together with the recovery of the rand against the major
currencies and other factors.

SA's economy is expected to continue expanding at a rate of 3% a year.
"This growth would in part be brought about by government expenditure as
well as private investment, which will support growth in gross fixed capital
formation," says the federation's Pierre Blaauw.

"Prudent finances have culminated in a declining budget deficit which,
coupled with government's focus on infrastructure development, holds great
promise for the civil industry," Blaauw says.

Federation members were encouraged by increased tender activity in the
latter part of last year. However, Blaauw says underspending due to
institutional capacity problems is still preventing the full benefit of
rising government capital expenditure from trickling down to the industry.

The industry is planning a summit at which some of these issues will be
discussed. Meanwhile, some construction analysts have said that SA's rate of
capital expenditure is still not high enough to catch up on the country's
R170bn social and economic infrastructure backlog.


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