INSIGHT
ACI GAINS TRACTION
Edited by Leon Louw
Afrimat’s Construction Index gained some traction in Q3 of 2019.
A
frimat, the JSE-listed open pit
mining company providing
industrial minerals, bulk
commodities and construction materials,
has released the findings of the
Afrimat Construction Index (ACI) for
the third quarter of 2019. The ACI is a
composite index of the level of activity
in the building and construction sectors,
compiled by renowned economist Dr
Roelof Botha on behalf of Afrimat.
During the third quarter of 2019, the ACI
outperformed total economic activity in
the country, recording an increase of 5.1%
quarter-on-quarter, compared to an increase
in the Gross Domestic Product (GDP) of only
0.7% (in real terms). According to Botha,
another encouraging feature of the latest
index is the attainment of a higher level than
a year ago.
“Most importantly, however, is the
continuation of a more stable trajectory, as
measured by the four-quarter average for the
ACI,” says Botha. “It is clear, therefore, that
there is still some life in the construction
sector, with improved levels of activity
having been recorded since the first quarter
of 2019 in the values of buildings completed,
building plans passed and both the value
and volume of building materials produced.”
Botha nevertheless notes concern over the
continued lethargy in construction sector
Figure 1: Afrimat Construction Index for Q3 2019.
value added and the decline in employment,
albeit marginal.
“The declining trend in the ACI’s four-
quarter average value that kicked in during
the second quarter of 2017 has now been
reversed, and the new growth phase
should gain some momentum in 2020
as a result of the solid performance of
capital formation growth over the last two
quarters,” says Botha. “Interest rate relief
is desperately needed in the economy, in
general, and the construction sector, in
particular, for growth to become sustained
and to accelerate.”
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