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16 October 2019

Insufficient demand for building and construction
work remains a constraint for the industry and is unlikely to improve notably
in the near term, the Construction Industry Development Board (cidb) says.

Its third-quarter SME Confidence Survey, released
on Tuesday, shows that the domestic building and construction industry
continues to struggle amid tough economic conditions.

“Sentiment remained in the doldrums as both general
building and civil engineering contractors continued to experience a severe
shortage of work. In fact, for some of the subsectors, activity was at its
weakest level since the 2008/9 financial crisis,” comments cidb monitoring and
evaluation project manager Ntando

Building confidence remained largely unchanged in
the third quarter, gaining one index point following the depressed reading of
30 in the previous quarter.

Skosana adds that “low confidence was underpinned
by a further and deeper decline in activity. In addition to the current lack of
demand, there is no sign within the survey data to suggest that activity will
pick up in the near term.”

Regardless of the movements in confidence, activity
growth remained under pressure across all the grades. This is especially the
case for general building in Grades 5 and 6, which registered the worst
activity reading since the survey was launched in the third quarter of 2008.

On a provincial level, confidence improved in
Gauteng and KwaZulu-Natal.

“However, in contrast to the uptick in confidence
in Gauteng, building activity slowed sharply. The activity indicator is now at
its worst level on record,” Skosana points out.

The Western Cape also experienced a severe shortage
of building work.

Civil engineering confidence was unchanged from the
previous quarter at a historic low of 26 index points.

“Contributing to the downbeat sentiment was a
slowdown in construction activity,” says Skosana.

Across the grades, the deterioration in sentiment
was most pronounced among civil engineers in Grades 3 and 4 where business
confidence fell to an all-time low of 16 index points.

Provincially, the Western Cape was the worst
performer, with a drop in confidence to a new historic low of nine index points
as a result of a sharp slowdown in construction activity.

“The activity indicator is now at its worst level on record,” says Skosana. http://www.engineeringnews.co.za/article/building-construction-activity-at-crisis-levels-cidb-2019-10-15

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