Construction World February 2018

COMMENT

I t forecasts that the world’s GDP is expected to increase by 2,7% this year. According to its analysis, the economies of only four countries will contract into negative terrain (Venezuela, Puerto Rico, Equatorial Guinea and North Korea) while Brunei’s economy will contract to just 0,3% above negative growth. The usual suspects are top of the list: China’s economy will grow by some 5,8%. This economy is slowing down – a percentage point less than last year’s growth. Notwithstanding this, China’s economic growth still represents about a third of global economic growth. In terms of growth in large economies, India will be the best performer at 7,8% (Dominica is forecast to be the world’s best performing economy at 8,8%). Various countries in Southeast Asia will continue their upward trend: Vietnam, Cambodia, Myanmar and Laos are said to grow more than 6%. In the developed world the growth cannot be as rapid and should, according to the research, be around 2%. Only four countries (mentioned above) will have negative growth, the worst being Venezuela’s economy which will feel the dire effect of years of gross mismanagement which have led to hyperinflation. Where is South Africa in the economic growth stakes? According to the EIU, 2018 will see the South African economy grow by up to 2% … not bad, but not good for a developing country (currently the forecast is below the world average of 2,7%). The research was done before the ‘Ramaphosa euphoria’ and hopefully the increased political certainty will cause economists to adjust the growth forecasts upward later in 2018. Key driver Infrastructure development will be a key driver in South Africa’s growth prospects. This was the message of Economic Development Minister Ebrahim Patel, who was in Davos for the World Economic Forum (WEF) as part of the South African delegation who showcased the country's attractiveness as an investment destination and trade partner. He said the South African government was investing heavily in its infrastructure build programme – spending about R300-billion a year. Despite advances in the sphere of energy supply, there was still a massive need for rail, water, freight logistics, and road infrastructure. Since the world economic crisis in 2008 there have been some economies that have grown at a fast – even feverish – pace, but in general, most economies have grown at a slow but steady pace. According to the Economist Intelligence Unit (EIU) this moderate but steady pace of growth will continue in 2018.

Highlights in this issue

Mumbai in India’s skyline: in terms of large economies, India’s economy will be the best performer in the world.

Ho Chi Minh City in Vietnam: various countries in Southeast Asia will have a growth of 6% or more.

Johannesburg, South Africa: will an improved political climate lead to better economic growth?

Wilhelm du Plessis Editor

@ConstWorldSA

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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

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CONSTRUCTION WORLD FEBRUARY 2018