Construction World October 2022

COMMENT

Every quarter, Afrimat’s Construction Index (ACI) provides a detailed overview of activity in the South African construction industry in the preceding quarter. It is a composite index of the level of activity in the building and construction sectors and is compiled by the respected economist, Dr Roelof Botha on behalf of Afrimat. T his index is the most accurate of the various indices for the construction industry in South Africa as it is not based on sentiment, but draws on other indices to arrive at the overall index. These range from the value of the total buildings completed, the volume of building materials sold, to the value of passed building plans. The ACI shows that the construction sector managed to increase the value it added to the economy by 4,1% in real terms compared to the previous year. This increase in value add is despite various factors that influenced economic activity in South Africa. This included the floods in KwaZulu Natal, extremely high fuel prices, loadshedding and strikes in mining companies. In addition, the ACI also recorded an

ongoing loadshedding and the unstable and increasing costs of diesel combined with administrative and procurement difficulties, make the industry challenging. However, the challenging context can be overcome by diversifying and being nimble in the current cut-throat industry. Until next month.

increase of 2,4% over the first quarter of 2022 which is mainly because of the positive trend for both the volume and the value of building material sales. This bodes well for future construction activity. Of the nine indicators of which the ACI is a composite of, the value of buildings completed in the metros and larger municipalities had a significant 21% year-on-year rate of increase. This resulted in an increase in employment in construction during the second quarter of 2022 and is a direct result of the start of more public-private partnerships in fulfilment of the government’s infrastructure drive. Notwithstanding these green shoots, South Africa remains a tough environment for construction companies to do business. The

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