Recovery in construction industry

2012-01-18 00:00

LONG-suffering role-players in the civil construction industry can look forward to some good times, judging by the latest Civil Construction Index released by FNB and the Bureau for Economic Research (BER).

FNB chief economist Dr Cees Bruggemans told The Witness yesterday that there is certainly a hint of a cyclical recovery taking hold in the industry.

The feedback from businesses involved in contracts awarded by the private sector, public corporations and local government authorities, indicated that activity levels are set to improve steadily.

However, while activity hit its highest level in 18 months, Bruggemans conceded that work remains scarce in certain areas.

The FNB/BER civil construction confidence index revealed that more than three-quarter of survey respondents are pessimistic about current conditions.

The index did improve, however, coming in at 26 in the final quarter of 2011 compared with 21 in the third quarter of 2011. The latest performance has lifted the index back to the level recorded in the final quarter of 2010.

“The depressed graph line [of the index] will probably look different in a year’s time.

“The newly announced [R17 billion] rail link between Mpumalanga and Swaziland is one new project and there will be others.

Activity levels will pick up as we go forward.

“Although, it is not as if the industry is on a runaway train in terms of the pace of activity.”

Bruggemans expects fewer retrenchments in the industry over the next few quarters.

“Employment will probably move sideways, with retrenchments not being as severe as in the past.”

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