Business confidence in building sector on five-year high

The First National Bank/Bureau for Economic Research (FNB/BER) building confidence index showed a rise from 41 in the second quarter of the year to 48 index points in the third quarter, despite a slowdown in activity of main contractors, sub-contractors and architects.

The 48 points, out of a possible 100, mark the index's highest level in five years.

Overall, growth in the building sector continued in the third quarter of the year, but at a more modest pace than in the second.

"Even though main contractor [and to a lesser extent sub-contractor] activity slowed during the quarter, other smaller, informal projects continued to support the sector.

This is reflected in the confidence of building material retailers, which rose from 46 to 56 in the third quarter of 2012," FNB said in a release.

Compared to the second quarter of 2013, the index found the following changes in confidence levels took place: manufacturers of building materials (+25), retailers of building materials (+10), quantity surveyors (+7), architects (+4), main contractors (-2) and sub-contractors (-2).

"Looking ahead, the building pipeline remains supportive of further growth. However, the recovery in building activity is likely to be modest given the headwinds confronting the sector in the form of lacklustre economic growth, slower growth in consumer spending and, more recently, labour unrest," the release said.

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