Monday, 09 February 2004 02:00

Apathy in building industry

Concern about apathy regarding training in the South African building industry was the major topic at a recent annual conference.

Monday, 26 January 2004 02:00

Building and construction 2004

Outlook for 2004

Monday, 24 November 2003 02:00

Building institute raises funds for learners

CIOB raises funds for learners

Monday, 20 October 2003 02:00

Coatings for Africa

MARMORAN, makers of specialist coatings for the building industry, have won one of the largest contracts of its kind to be awarded in Africa.

Wednesday, 17 September 2003 02:00

Building costs blamed on materials

THE building industry has blamed high price increases over the past year mainly on building material price hikes, some of which far exceed inflation.

Friday, 01 November 2002 02:00

Cement price hikes 'hurt building sector'.

Members of the building industry are reeling from the shock of a proposed 20% hike in the price of cement. This follows a double digit price rise in the past year.

Construction IndustryThe proposed price rise is likely to lead to a substantial increase in building costs. Stellenbosch University's Bureau for Economic Research (BER) warned yesterday that, together with higher interest rates, a weighty rise in the price of cement would contribute to building work being less affordable and would lead to a slowdown in demand.

Ultimately, this will have a negative effect on the economy.

Cement producers PPC, Alpha and Lafarge would not comment on what their price hikes would be yesterday. However, a number of concrete product manufacturers have said that PPC, for one, had indicated a 20% price rise in January.

The rise would not be applicable to all clients, because prices vary between clients and cement product types, but double-digit rises were expected all round.

The BER's Charles Martin said cement sales were on the rise for the first time in years, and that now would be considered an ideal time for cement producers to introduce substantial price hikes.

PPC and Alpha said their price hikes were based mainly on increases in their input costs, which were affected by the depreciation of the rand. Capital equipment and spares, for instance, were sourced mostly from the US and Europe.

PPC also fingered Spoornet's prices and inefficiency as contributing factors to rising cement prices. Colin Jones of PPC said problems with rail availability had forced the cement producer to switch to more expensive road transport in some instances.

PPC and Alpha said price shifts were not based on attempts to come in line with international pricing or to move towards import parity pricing.

Lafarge declined to comment on price strategy issues.

The cement buyers said the reasons given for the increases were reasonable, but 20% was beyond what could be justified.

Several cement buyers have also accused producers of continuing to operate in a cartellike fashion. PPC, Alpha and Blue Circle operated as a cartel until 1996, when it was officially disbanded. A price war ensued in an attempt by the producers to secure market share.

 

Thursday, 12 September 2002 02:00

The lure of a record low

 Overcapacity in the building industry and a weak rand have pushed SA building costs to historic lows against other countries.

Construction IndustryThe highest contract price of an air-conditioned office building in SA is now only US310/m² - 13% of the 2 350 cost in the US - according to a survey by international consultants E C Harris. It is only 42% of the $730 top cost in Slovakia, the next lowest on a list of 35 countries . Japan is the highest at $2 630/m².

'The price differential is at the point where it means multinationals will now open in SA because the setup cost is so low,' says Harris's head of cost research, Paul Moore. 'The low costs are reinforced by low labour costs, an important component of building.'

But it could also mean higher building-cost inflation: building costs rose 20,4% annualised last quarter.

Moore says there are also signs that SA contractors are using their price advantage to build up business elsewhere in Africa. 'With no funds for tourism or infrastructure, they are looking for outside opportunities, especially in the north,' he says.

Harris forecasts military construction will rise 17% this year as private property development slows down.

 

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