Confidence in South Africa’s building industry remains depressed even though the index rose from 29 to 38 points in the third quarter of this year according to figures released by FNB.
Confidence levels among architects were slightly higher, rising from 34 to 48 points while among quantity surveyors it rose from 24 points to 47.
The FNB Building Confidence index can vary between zero (or no confidence) and 100 (extreme confidence) and is used to indicate how business conditions in the building industry are perceived.
In the planning and renovation sector of the property market, confidence levels were more positive than those in the building sector where contractors and sub-contractors expressed concerns over the lack of building work.
According to FNB the building sector tends to lag the rest of the South African economy by between two and three years and this is probably a contributory reason for confidence levels being depressed for the first half of this year and gradually starting to improve for the final quarter.
FNB says that the recovery in confidence is supported by a noticeable improvement in the number of contracts being awarded. It takes up to 18 months for building work to start after plans have been finalised and as a result the building industry may start to show signs of recovery in the second half of next year.
Conditions for manufacturers and suppliers of building materials have remained dismal in 2010 but the confidence levels in this sector are likely to improve once new projects get underway.
FNB’s Building Confidence Index has been hovering around 30 for the past two years and its rise to 38 points may be an indication that conditions are improving for the building industry.
Earlier this week Master Builders South Africa called for a summit of industry leaders to address the dismal conditions facing the building industry.
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