Construction World January 2018

COMMENT

T his better than expected growth has economists revising growth figures upwards for 2017. It bodes well for South Africa, given the fact that the country has been placed on a sovereign credit rating downgrade by Moody’s Investor Service. The Reserve Bank and IMF had forecast a growth rate of 0,7% in 2017 while the World Bank and Treasury forecast growth of 0,6 and 0,7% respectively. Even though the growth was weaker in the third than in the second quarter, this is the first time since 2015 that GDP grew at more than 1% for two consecutive quarters. This trend may well be a sign that South Africa’s economic recovery is gaining traction and some economists go as far as saying that the economic recovery in 2018 will surprise many. Unfortunately the good news is tempered by the RMB/BER Business Confidence Index for the fourth quarter. This index was at 34 and even though it is an improvement from the seven and a half year low of 29 in the second quarter We start 2018 on a positive note: According to economists, South Africa’s GDP growth was 2% (quarter on quarter) in the third quarter of 2017. This was primarily due to a 44% growth in agriculture, forestry and fisheries. Mining and manufacturing also had a favourable impact on the GDP. of 2017, the sentiment in the country is still decidedly depressed. The Index surveys 1 600 senior business people in the building, manufacturing, retail, wholesale and motor trade sectors. The fieldwork for the survey was done during the first three weeks of November 2017– before the Standard & Poor downgrade of South Africa’s local currency rating to speculative grade. According to this Index, building confidence fell from 44 to 34, in the process reversing the gains made in the third quarter. This drop is due to the challenging conditions that exist for non-residential contractors. However, the sentiment amongst residential contractors was at 43 – high when compared to non- residential contractors where the sentiment contracted by 11 points. The level of business confidence is, according to RMB, consistent with the private sector’s wait-and-see approach. The index will only be jolted upwards when there is more political certainty such as the emergence of strong political leadership that will implement market-friendly policies.

Highlights in this issue

CW’s interview with Riaz Saloojee about Concor’s USP and optimism for the future – page 10

How innovation cuts time on a road infrastructure project – page 36

The positive socio-economic impact of the new Main Road 577 in KZA – page 40

Wilhelm du Plessis Editor

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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 JANUARY 2018