Overall confidence in the building industry has increased marginally over the past quarter, but is still far below the level it was this time last year.
This is according to the latest FNB building confidence index, released on Tuesday.
The index increased from a value of 50 in the second quarter of this year to 52 in the quarter ended September 1.
The third quarter level compared with an index value of 85 in the corresponding quarter a year ago, FNB analysts said.
The bank’s chief economist Cees Bruggemans said the rise was explained by a more than doubling in the confidence level of retailers of building materials and to a lesser extent by a six point increase in the confidence of quantity surveyors.
There was a two point increase in the confidence of residential contractors, to 34.
Activity in this segment of the industry remained ”most unfavourable”, Bruggemans said, and 87% of respondents to the survey indicated that lack of work was a serious constraint.
They had had to reduce their profit margins with the result that overall profitability took a knock, and the number of layoffs swelled.
FNB property strategist John Loos said the business confidence of non-residential building contractors declined from 70 in the second quarter to 66 in the third.
Respondents reported that they had reduced the number of people employed, and that these figures were well above the level expected at the time of the second-quarter survey.
They did not expect a major change in business conditions in the final quarter, he said.
The index measures the business confidence of the major role players and suppliers in the building industry such as architects, quantity surveyors, contractors, sub-contractors, wholesale and retail
merchants, and manufacturers of building materials. – Sapa