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SERVING THE AFRICAN EQUIPMENT INDUSTRY
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A slow rebuild in the local construction industry
The early half of 2023 saw the local construction industry buoyed by a positivity it has long since experienced while the mining industry , on the other hand , has continued to deliver and support the economies of Africa in uncertain times – with economies facing polycrises , per the World Economic Forum in January : multiple , concurrent crises , compounding each other in an increasingly volatile trajectory – these are geopolitical and economic risks like the Russian-Ukraine war , inflation , trade wars and the rising cost of living , which in turn could lead to civil unrest and instability .
Notwithstanding negative sentiment , the South African Construction Industry Report pegged growth at 5 % for 2023 , to reach R232,263-million .¹ This was a clear silver lining on the back of a three-year contraction . According to Afrimat ’ s Construction Index ( ACI ), 2022 was especially challenging for South African construction companies . This was indicated too by Stats South Africa , which reported closures for 94 construction businesses in 2022 .² After returning to 2019 levels , the index dipped to below the 1.3 % decline in GDP in the fourth quarter of 2022 . Year-on-year , however , results were more positive as the ACI improved by 1.9 % to outperform the local economy .³
As the year wore on , a more sombre picture has been painted , with some forecasts predicting another decline , “ The construction industry in South Africa is expected to shrink by 1.9 % in real terms in 2023 , owing to headwinds caused by the ongoing energy crisis , supply chain disruptions , rising inflation , and a fall in the total value of building plans passed in the country .
“ The estimated decline in 2023 is also attributed to a decline in the business activities in the country . According to the Bureau for Economic Research , the seasonally adjusted average business activity index declined by 7.8 % in the first five months of 2023 , preceded by an annual decline of 3 % in 2022 . 4
Despite these challenges and the current loadshedding and construction mafia impediments , the future promises an uptick with consolidated government spending committed in February this year , which will hopefully amount to R7.1-trillion from FY2023-24 to FY2025-26 . Major allocations have been made , such as R233.1-billion for road infrastructure , ZAR121.3-billion for water infrastructure and R45.9-billion for housing infrastructure during the same period . The construction industry ’ s output will also be supported by the mega solar power plant 5 000MW program , which the government is undertaking with an investment of R20.1-billion . The construction works are expected to commence in Q3 2024 and end in Q4 2028 .
With this in mind , the South Africa Construction Industry Report 2023 says that output is expected to reach R276,797.9-million by 2027 . Looking forward , the Equipment Specs Handbook team wish you well in the coming months and hope that the handbook supports you in your business endeavours to gain a piece of the pie , that has long been in the baking .
References : 1 . https :// www . globenewswire . com / news-release / 2023 / 03 / 03 / 2620168 / 0 / en / South-Africa-Construction-Industry-
Report-2023-Output-is-Expected-to-Reach-ZAR-276-797-9-Million-by-2027 . html 2 . https :// www . moneyweb . co . za / news / industry / construction-sector-liquidations-up-32-in-2022 / 3 . https :// www . afrimat . co . za / media-press / afrimat-construction-index-aci / 4 . South Africa Construction Market Size , Trend Analysis by Sector ( Commercial , Industrial , Infrastructure , Energy and Utilities , Institutional and Residential ) and Forecast , 2023-2027 ( marketresearch . com )
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EQUIPMENT SPECS HANDBOOK 2023 / 2024
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