While contractors are anticipating more work over the next few months, business confidence among architects has declined for the second consecutive quarter, citing ‘municipal inefficiencies’ as a hinderance according to the latest FNB/BER Building Confidence Index for Q1 2025.
“Better activity at the start of the building pipeline signals more building projects in future and aligns with building contractors’ expectations of more work next quarter,” comments Siphamandla Mkhwanazi, Senior Economist at FNB. “ However, this poses a risk to the business mood should these expectations not materialise. In addition, delays at municipal levels again seem to stand out as a crucial hinderance to faster development, specifically in preparing work and plans for construction.”
After registering a solid improvement in Q4 2025, the index eased in Q1 2024 with overall profitability under severe pressure which weighed on sentiment.
The latest data from Statistics SA shows real expenditure on building investment declining by 2.6% year-on-year in Q4 2024 largely due to a +-6% year-on-year decrease in real residential building investment while commercial building investment rose by 4.7% year-on-year.
However, FNB says that despite the deterioration in activity and profitability, building contractors are optimistic about prospects for activity, employment, profitability, and general business conditions next quarter.
Hardware retailer confidence was at its highest level in the index since the start of 2022 while activity among quantity surveyors worsened but gained four confidence points.
