cidb: confidence largely flat www. wsae. org
ON POLICYMAKERS’ DESKS
cidb: confidence largely flat www. wsae. org
The business confidence in 2018 Q1 was largely flat for both general builders and civil contractors.
General building confidence, as measured by the cidb SME Business Condition Survey, was flat at 36 index points in 2018 Q1. It is encouraging that key underlying indicators ticked up, though. Nevertheless, 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 nudge confidence higher. Ntando Skosana, project manager for Monitoring and Evaluation at the cidb, observed,“ 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 longterm averages.” Among the big four provinces, Western Cape building contractor confidence remained above the 50-point neutral mark. Confidence ticked down 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 were dissatisfied with current business conditions during the quarter,” highlighted Skosana.“ However, this should not come as a surprise, especially when one looks 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 the exceptionally low levels seen in 2017 Q4. Skosana pointed out,“ It is encouraging that both activity and profitability managed to claw back from their worst respective levels since 2011 Q1 and 2010 Q3.” She added,“ These indicators still came in below their long-term averages, however, which explains why confidence remains low.” From a grades perspective, Grades 5 and 6 civil contractor confidence was mostly flat against the backdrop of better activity, while pressure on profitability persisted. The uptick in confidence for Grades 3 and 4 was slight and was barely supported by underlying indicators. The increase in confidence for Grades 7 and 8 was notable, from 24 points to 30. This came on the back of improved activity and profitability. At the regional level, civil contractors across all four provinces registered confidence levels of below 40 index points. This implies that, on average, more than 60 % of respondents in each of these provinces rated business conditions as unfavourable during the survey quarter. Skosana pointed out:“ The provincial picture for civil contractors was rather morose, especially in light of the reversed gain in confidence for the Western Cape cohort, where confidence plunged to its worst level since 2013 Q2. While one saw
4- CEC June 2018