BUILDING CONFIDENCE DROPS TO 20-YEAR LOW

THE FNB/BER Building Confidence Index dropped to a more than 20-year-low of 13 points in the first quarter after rising to 25 points in the last quarter of 2019, and further contraction was likely, FNB property economist Siphamandla Mkhwanazi said yesterday. Close to 90 percent of respondents were dissatisfied with prevailing business conditions. All six sub-sectors surveyed registered lower confidence, led by architects (-27 points) and main contractors (-16 points). Quantity surveyor confidence was at its lowest level on record. No respondents in the building materials manufacturing sector were satisfied with business conditions. Main building contractor confidence fell to 17 points in the first quarter, from 31 points in the last quarter of 2019, the lowest level of the index since the third quarter of 1999. The lower confidence was due to a deeper contraction in building activity. “The survey results toward the end of 2019 were reasonably upbeat. However, this seems to have been an outlier – activity in the first quarter has fallen once more to a multi-year low,” he said. Moreover, activity growth worsened in both the residential and non-residential sector. Sentiment for architects and quantity surveyors dropped dramatically compared with the last quarter of 2019. Mkhwanazi said: “It is difficult to see an improvement in the fortunes of the building sector if plans for new/expansion work are this scarce.”