As an example, Dr Botha, who was interviewed at the release of the Afrimat Construction Index (ACI) yesterday, cited the SA National Road Agency’s recent own admission that 238 projects had been stalled for 18 months while the organisation determined the exact meaning of the term “local,” in their tender documents.
He said the government had spent some R223.6 billion on infrastructure in the 2021/2022 financial year, which was 22 percent more than the 2020 fiscal year, notwithstanding the low base of the 2020 financial year due to Covid-19 restrictions. An increase of more than 11 percent had been earmarked in the 2022/23 fiscal year.
The ACI for the fourth quarter of 2021 showed activity in the building and construction sectors recovered swiftly from the Covid-19 induced slump that occurred during the second quarter of 2020, increasing by 74 percent within only two quarters but since then, progress had been muted.
This was due mainly to a slow rollout of the government infrastructure programme and a slowdown in commercial building, said Dr Botha.
A year-on-year improvement of 0.8 percent was nevertheless realised in the fourth quarter, and the improvement over the fourth quarter of 2019, pre-Covid-19) stood at 1.3 percent.
He said the receding fourth wave of Covid-19 infections could pave the way for significantly higher levels of construction sector activity during 2022, aided by a continuing build-up of inventories in the economy, as well as increasing public sector spending on roads and renewable energy projects in particular.
The values of hardware retail sales and wholesale sales of construction materials continued to perform strongly in the index and were 60 percent and 55 percent higher, respectively, than in the base year of 2011.
Two other indicators that were at higher levels than two years ago were building material sales and employment in construction.
Meanwhile, the FNB/BER Building Confidence Index, also released yesterday, rose to 40, from 34 in the fourth quarter of 2021, the highest confidence since early 2018.
However, the “core” building sector index (excluding hardware retailers and building material manufacturers) was at 31, from 27 in the quarter.
Main contractor confidence slipped to 25 from 30, although the underlying activity indicator remained relatively stable, said FNB senior economist, Siphamandla Mkhwanazi.
The confidence of building sub-contractors jumped by 17 index points to 47, its best level since mid-2018.
“The results point to a strong showing in terms of smaller building projects, many of which would be considered alterations to existing structures rather than new buildings. This is why we are seeing more optimism from building sub-contractors than main contractors,” said Mkhwanazi.
Activity among non-residential builders was markedly better, boosting confidence, and a similar, although more restrained, trend was observed in the residential sector.
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