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