SA Affordable Housing May / June 2018 // Issue: 70 | Page 10

ASSOCIATIONS
Contractor confidence
flat in Q1 2018
General building confidence was flat at 36 index points
during the first quarter of the year.
The latest gross domestic (GDP) growth statistics from Statistics SA (Stats SA) show a fourth consecutive decline in output in the
construction sector.
D
espite flat building confidence – as measured by the
Construction Industry Development Board (cidb)
small and medium-sized enterprises (SME) Business
Conditions Survey – the cidb note it is encouraging that
key underlying indicators experienced an uptick. Even
though they stayed at poor levels.
Constraints to business operations moved sideways but
remained elevated. Across the grades, only Grades 3 and 4
lost confidence in line with weaker underlying indicators
among general builders in this group. For Grades 5 and 6 as
well as Grades 7 and 8, the improvement in the momentum
of activity growth helped to nudge confidence higher.
Ntando Skosana, project manager for monitoring and
evaluation at the cidb, observes, “It should be noted that,
even though one sees positive movements in some of the
underlying indicators across the grades, confidence levels
remain at depressed levels – below long-term averages.
”Among the big four provinces, Western Cape building
contractor confidence remained above the 50-point
neutral mark.
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MAY - JUNE 2018
AFFORDABLE
SA HOUSING
Confidence decreased by three index points to 54 points
during the quarter. Although sentiment improved for
builders in the Eastern Cape, Gauteng and KwaZulu-Natal,
confidence levels registered an average of 30 points.
“At this level of confidence, a disappointingly high
majority of about 70% of respondents are dissatisfied with
current business conditions during the quarter,” highlights
Skosana. “However, this should not come as a surprise,
especially when you look at the underlying indicators.”
Civil engineering confidence also came in at 36 index
points during the first quarter of 2018, after ticking up by
one point. Both activity and profitability were lifted off
exceptionally low levels seen in the first quarter of 2017.
Skosana points out that, “It is encouraging that both
activity and profitability managed to claw back from their
worst respective levels since the first quarter of 2011 and
the third quarter of 2010.”
She adds, “These indicators still came in below their
long-term averages, however, it explains why confidence
remains low.”