Construction World May 2023

COMMENT

Despite the tough conditions for South African construction (building and civils), optimism and improved performance are gaining traction in this sector despite the odds that are stacked against it in the form of the energy crisis South Africa is experiencing, a rapidly weakening Rand and the perception that the country is losing is status as the leading market on the continent - which means that investment is dwindling. E conomist Dr Roelof Botha, who compiles the Afrimat Construction Index (ACI) on behalf of Afrimat, says the poor performance of the economy during the last quarter of 2022 was evident in construction sector activity: the ACI fared marginally worse than the decline in real GDP of 1,3% quarter-on-quarter. The year-on-year performances were nevertheless positive and the ACI’s improvement of 1,9% outperformed the economy as a whole. This marked the return to positive growth for value added by the construction sector, both on a quarter on-quarter and year-on-year basis. Despite its now positive territory, the ACI which stands at 120,9 for Q1 of 2023 has a far way to go to equal the record high of the index of 143,6 in 2016. It is still some 21% higher than the base period when the index was started in 2011. For this record to be

the needs of respective communities.

equalled investor confidence needs to return. The slow improvement in construction activity can be attributed to the increased interest rates and the state of the country’s municipalities. With more functional municipalities, more infrastructure spend will be unlocked which will change the ACI completely. In terms of government budget, the three tiers (excluding state-owned enterprises) amount to an impressive R157b, and 39% of this is channelled to the provinces and municipalities. Sadly, out of the 257 municipalities, 175 are on the brink of a crisis, and of these 151 municipalities are already bankrupt and insolvent. It’s therefore fairly obvious that the majority of the country’s municipalities are simply not in a position to spend transfers from National Treasury earmarked for infrastructure to satisfy

Wilhelm du Plessis Editor

BEST PROJECTS building, specialist contracting or supplying, consulting engineering and architecture. Entry is free. TWENTY-SECOND Construction World publishes the first call for entries for Best Projects 2023 on pages 20 and 21. The closing date for entries is 8 September and the awards event will be in November. You are encouraged to enter worthy projects in civil engineering,

2023

EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & GRAPHIC ARTIST

PUBLISHER Karen Grant

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2 CONSTRUCTION WORLD MAY 2023