Sentiment in SA’s built environment remained unchanged during Q4 2024 according to the latest FNB/BER Building Confidence Index, masking a broad improvement in industry conditions, especially pertaining to work at hand.
While activity among main building contractors rose to its best level since Q1 2023, supported by a marked increase in activity, employment growth, and overall profitability, business confidence among sub-contractors, architects, and hardware retailers was lower relative to Q3 2024.
Building sub-contractors are struggling with the demand for residential solar installations (which boosted the sector through late 2022 and 2023) having fallen dramatically on the back of no loadshedding. This has disproportionately weighed on the segment.
Business confidence among building material manufacturers is still relatively low despite some improvement in production and a decline production costs relative to the same period in 2023.
While the business mood among hardware retailers has deteriorated, sales fared exceptionally well.
Activity among architects and quantity surveyors deteriorated somewhat during Q4 2024 albeit better than the long-term average. Professionals who participated in the index highlighted the difficulties and delays in getting municipal plans or project approvals. This, coupled with payment delays, has weighed on their business confidence.
After faring poorly in previous quarters, residential building activity seems to have partially recovered during Q4 2024 while activity in the commercial sector continued to increase despite order books remaining comparatively weak.
Despite more work currently, the lack of new demand as a business constraint rose, suggesting that contractors remain concerned about the short-term prospects.
