Modern Quarrying Q2 2023

SOUTHERN AFRICAN INDUSTRY

Afrimat, a leading mid-tier open-pit mining company providing Industrial Minerals, Bulk Commodities, Construction Materials and Future Materials and Metals, has released the findings of the Afrimat Construction Index (ACI) for the fourth quarter of 2022. The ACI is a composite index of the level of activity within the building and construction sectors in South Africa. AFRIMAT CONSTRUCTION INDEX DIPS MARGINALLY IN FOURTH QUARTER OF 2022

A ccording to economist Dr Roelof Botha, who compiles the Index on behalf of Afrimat, the poor performance of the economy during the last quarter of 2022 was evident in construction sector activity, with the ACI faring marginally worse than the decline in real GDP of 1,3% quarter-on-quarter. “The year-on year performances were nevertheless positive, with the ACI’s improvement of 1,9% outperforming the economy as a whole,” says Dr Botha. One of the highlights is the welcome return to positive growth for value added by the construction sector, both on a quarter-on-quarter and year-on year basis. It is worth noting that the construction sector component of GDP only includes the value added by contractors, whilst the ACI is based on a composite index of construction sector activity that includes another eight indicators. “It is thus a substantially more comprehensive barometer of the state of the construction sector, as illustrated by the fact that two of its indicators, i.e., the value of wholesale trade in construction

materials, and hardware sales (retail), amounted to a combined R69,7b in the fourth quarter, compared to a construction sector contribution to GDP of only R36,8b.” Dr Botha points out that the ACI has not yet managed to claw back the structural decline from its record high of 143,6 index points in the third quarter of 2016. “Although, at an index value of 120,9, the ACI is almost 21% higher than the base period, i.e., the first quarter of 2011, until such time as a marked improvement of investor confidence occurs, growth in the construction sector is likely to remain muted.” Five of the nine individual indicators comprising the ACI recorded increases in the fourth quarter, compared to the same quarter in 2021. Over the past year, the star performer was the value of wholesale sales of construction materials, with an improvement of 9,3%. “Hardware retail sales also provided a boost to the ACI on a quarter-on-quarter basis, with an increase of 8%, but the remuneration of construction workers was the best performing indicator, compared to the third quarter of 2022, achieving a double-digit increase.”

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