Quarry Southern Africa January 2017 | Page 42

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In October 2016, the International Monetary Fund( IMF) revised its global growth forecast for 2016 and 2017 downwards to 3.1 % and 3.4 %, respectively. Gross domestic product( GDP) growth in most emerging markets has dropped dramatically over the past two years, and Africa is no exception.

Deloitte’ s recently published Africa construction trends report 2016: Africa’ s changing infrastructure landscape gives an overview of the state of the construction industry in Africa, comparing data from the past few years to identify trends, and delivering insights on both the regional and continental level. The report includes 286 African construction projects, valued at a total of USD324-billion, which had broken ground by 1 June 2016 and have a minimum value of USD50-million.

At the same time, Statistics South Africa( Stats SA) recently released the Annual Financial Statistics( AFS) 2015 report, with the Quarterly Employment Survey( QES) 2016 results giving us a glimpse of how South Africa is faring.

Africa construction trends report 2016 The Deloitte report shows that sub-Saharan Africa’ s growth forecast for 2016 is only 1.4 %

— the first time the region has fallen below the global average since 2000. However, recovery is expected in 2017, and average regional growth for 2016 – 2017 is predicted at 3.6 %. In North Africa, contracting economic activity in South Sudan and Libya has negatively impacted growth, but Libya’ s expected return to growth in 2017 pushes the average regional outlook for 2016 – 2017 to 1.6 %. South Africa accounts for almost half( 41) of southern Africa’ s 85 construction projects, valued at USD93.4-billion, and has the most projects by country in Africa. The country also accounts for the majority( 48.2 %) of the region’ s infrastructure and capital project activity, and is home to four of the 10 largest projects across southern Africa. South Africa is also home to the majority of projects in the regional real estate sector, which accounts for 30.6 % of all construction activity.

One of the biggest contributors to the slowdown in growth is the decline in commodity prices, which some estimate will only return to pre-2013 levels by 2020. Exposure to downswings has been detrimental to African countries’ macroeconomic landscape, and investment in extractive industries has declined sharply, as has exploration activity. The report calls on African governments to become value-added and services-orientated economies to minimise the effect of commodity price slumps.

INSIGHT

AFS 2015 and QES 2016 Stats SA’ s AFS 2015 shows that the mining and quarrying sector saw an increase in turnover of 3.0 %, accounting for 6.7 % of total turnover. The sector also saw a 0.2 % increase in capital expenditure on assets and a 4.6 % increase in the carrying value of property, plant and equipment, and intangible assets. According to the QES 2016 results, the mining industry saw an increase of 2 000 employees for the third quarter of 2016, as well as an increase in gross earnings of ZAR979-million during this period.

Meanwhile, the construction industry saw an increase of 5.3 % in turnover, accounting for 5.1 % of total turnover. The industry’ s capital expenditure on assets decreased by 10.4 % to R5 092-million( down from R5 524-million in 2014), while the carrying value of property, plant and equipment, and intangible assets increased by 8.2 % from R45 565-million in 2014 to R49 296-million in 2015. Based on QES 2016 results, the construction and business services industry saw an increase of 6 000 employees in the third quarter, and an increase in gross earnings of ZAR680- million for the period.

The AFS report collects a range of financial statistics for enterprises in the formal sector, with the aim of providing input to estimates of the annual GDP and its components. The QES contains results of the survey of quarterly employment statistics on the number of employees and gross salaries paid in selected industries.

40 _ QUARRY SA | JANUARY 2017