OWN CORRESPONDENTand REUTERS, Johannesburg | Tuesday
THE Building Industries Federation of South Africa (BIFSA) has revised down the sector’s growth forecast this year because of crime, the weak rand and recent political upheaval in Zimbabwe.
Executive Director Ian Robinson said in his annual report that “the single most negative domestic influence on the fortunes of the building industry remains the level of crime and government’s efforts have so far failed to improve the awesome statistics.”
South Africa has one of the highest rates of violent crime in the world. Last year, the country had 55.3 murders per 100000, which is more than nine times the level in the United States.
Yet the domestic economy remained fairly strong, Robinson said, adding the balance of payments was improving and export growth was rising.
“These circumstances suggest that the building industry will reflect some modest improvement in turnover levels albeit from a very low base, but earlier justifiable predictions of four percent growth this year will not materialise,” he said.
“Given the confidence we have in the economic fundamentals of South Africa, we nevertheless remain convinced that sustainable growth for the foreseeable future is a realistic ambition,” he added.
He was critical of recent labour unrest that was seen as a deterrent to growth and he called on the government to intervene to stimulate the industry.
Government work in the building industry would diminish to 15% of turnover by the end of 2000, he said. Under various government housing schemes at least 50000 houses would be built over the next three years.
South Africa’s Bureau for Economic Research (BER) predicted earlier this month the building and construction sector was expected to turn around in 2001.
The sector slipped into recession in 1998 after commercial lending rates spiked to a record 25.5% during the emerging markets crisis. Rates had fallen back to 14.5% but the effects of the hike are still reverberating through the industry, the BER said.