The current construction industry cycle is atypical, remaining in a post-recession recovery. However, a cyclical revival may be on the cards.

Industry adviser and University of Cape Town lecturer Dr Johan Snyman  told the Building Research Strategy Consulting Unit forum that studies have found that the construction sector is in a recovery phase, following a financial crisis, which is more modest and protracted than it would be following a normal cyclical downswing. Despite this, however, business confidence appears to be rising.

Snyman believes this upswing in business confidence could be foreshadowing what he terms a modest revival in the construction sector, Engineering News reported. “If you combine the business sentiment of those in the industry, there is a modest uptick. This is a leading indicator and, as such, an increase in business confidence often pre-empts an increase in overall sector performance. While constraints in the industry still exist, in nominal terms, there’s a clear indication of cyclical revival,” he said.

Research shows that an upswing in economic growth, which largely coincides with an expansion in building and construction activities, tends to be stronger and more prolonged, Engineering News reported. This is mainly due to the multiplier effect of construction. When more people are employed and are earning money, the country’s consumer base and buying power increase. Similarly, economic downswings that occur in conjunction with a decrease in construction activity tend to be more intense and longer lasting.