Construction World April 2018

COMMENT

Both the Rand Merchant Bank (RMB) Business Confidence Index and the Afrimat Construction Index (ACI) for the last quarter of 2017 were released recently. Both indices show an upward trend, a trend that was primarily brought about by positive political changes. However, there is the fear that the current uncertainty created by the land reforms could erase the gains made with the business confidence. Afrimat Construction Index Afrimat is an openpit mining company that provides industrial minerals and construction material. The Afrimat Construction Index (ACI) is a composite index of the level of activity within the building and construction sectors. The 2017 fourth quarter results of the ACI show an upward trend, broadly in line with the improvement in South Africa’s gross domestic product. After reaching an eight-quarter high of 127 at the end of 2016, the ACI declined for two successive quarters before recovering in the third quarter. It increased again in the fourth quarter of 2017 by 1,9%, to reach a level of 125,4. What the index indicates is that the construction sector continues to outperform the economy. The index is calculated from nine different constituent indicators.The improvement in the ACI between the third and fourth quarters of 2017 was driven mainly by the value of buildings completed by major municipalities, the retail sales values for hardware, glass and paint and the sales value of building materials produced. Five of the nine indicators included in the ACI showed improvements during the fourth quarter, with two others declining by less than 0,5%. The ACI bodes well for the construction sector’s growth prospects in 2018, especially with the change in the country’s political leadership. However, it too cautions about the impact of land reforms on the positivity.

Highlights in this issue

Online African expansion bauma CONEXPO Africa took place from 13 to 16 March. Although there can be no doubt that its support has been negatively influenced by market conditions in South Africa, the presence of delegations from countries elsewhere in Africa was encouraging to see. Crown Publications, the publisher of Construction World exhibited. It is a business-to-business publisher with a 30-year-plus track record and publishes six monthly and three quarterly magazines. It focuses on industry: mining, construction, capital equipment, mechanical and chemical engineering and electricity. Three of these publications, Capital Equipment News, Construction World and Modern Mining were highlighted at its stand. This year, bauma CONEXPO Africa had delegations from Botswana, Chile, Ethiopia, India, Kenya, Mozambique, Nigeria, and Zambia. Even though South Africa is still a powerhouse in African industry, the growth nodes have shifted to East Africa and to a lesser extent West Africa. While the main focus of Crown Publications is still on print in South Africa, its online offering, eNewsletters and PDF replicas enable it to increasingly transcend geographical borders and inform industry across Africa. RMB Business Confidence Index The Rand Merchant Bank (RMB) Business Confidence Index is compiled by the Bureau for Economic Research. This index rose to 45 points in the first quarter from 34 points in the fourth quarter of 2017 but remained below the 50-mark. According to RMB’s chief economist, this first quarter confidence jump is driven primarily by the expectations that South Africa will experience a more market-friendly phase with recent political changes in the country. Expectations have been raised that the country will make positive economic reforms.

Wilhelm du Plessis Editor

@ConstWorldSA

www.facebook.com/construction-worldmagazinesa

EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & DESIGN Lesley Testa CIRCULATION Karen Smith

PUBLISHER Karen Grant PUBLISHED MONTHLY BY Crown Publications cc P O Box 140 BEDFORDVIEW, 2008 Tel: 27 11-622-4770 • Fax: 27 11-615-6108

TOTAL CIRCULATION: (Fourth Quarter ’17) 5 024

The views expressed in this publication are not necessarily those of the editor or the publisher. PRINTED BY Tandym Cape

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CONSTRUCTION WORLD APRIL 2018