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Civil construction index sees slight uptick, perhaps too optimistic

29th January 2016

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

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While civil work from provinces and municipalities has held up well, contributing to an increase of three points in the First National Bank (FNB) and the Bureau for Economic Research’s (BER’s) Civil Confidence Index to 42 points in the fourth quarter of 2015, weak spending on construction by State-owned enterprises and the private sector will continue to weigh on growth.

Despite the rise in confidence, the current level of the index indicates that close to 60% of respondents are dissatisfied with prevailing business conditions.

“Civil contractors were relatively downbeat for much of 2015. After averaging 51 index points in 2014 and 53 in 2013, confidence averaged only 41 in 2015,” FNB senior industry analyst Jason Muscat pointed out.

But overall profitability improved noticeably during the quarter.

Confidence was further boosted by respondents’ expectations that construction work and profitability would be noticeably better in the first quarter of this year.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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