The 2019 SME Conditions Survey has once again confirmed the state of the South African building and construction industry. 

Building confidence ticked down from 33 to 30, as building activity slowed even further.

Ntando Skosana, Project Manager for Construction Industry Performance, noted that, “With the exception of a marginal uptick at the end of 2018, General Builder (GB) sentiment has trended downwards since the beginning of 2017.”

Across the grades, GBs in Grades 3 and 4 experienced the sharpest drop in sentiment – from 40 to 30 index points.

Although Grades 7 and 8 registered an uptick, it was still relatively low at 29 (from 23 previously) as activity growth in the segment remained under pressure.

Across the provinces, Gauteng was the only province where GB confidence declined – from 44 to 19.

Skosana noted that “despite upticks in the other provinces, confidence remains below the respective longterm average. Furthermore, the building activity indicator suggests that all provinces are experiencing a severe shortage of building work, most notably in the Western Cape.”

Civil Engineering confidence fell from an already depressed 31 index points, to an all-time low of 26.

Skosana says that this is concerning, as it implies that almost 75% of respondents are dissatisfied with prevailing business conditions.

All the grades registered a decline in confidence. Similar to GBs, the drop was most pronounced among CEs in Grades 3 and 4 where business confidence is now at 33.

Across the provinces, the Western Cape was the worst performer, with a drop in confidence to an all-time low of 18 index points.

According to Skosana, the marked deterioration in sentiment among CEs in the Western Cape was largely driven by weaker activity growth.

Overall, the results of the cidb SME business conditions survey point to continued, and broad-based (with respect to region and grade) weakness in construction activity in 2019Q2.

“In addition to poor demand currently, there is no sign within the survey data to suggest that activity will improve over the short term,” Skosana concluded.