South Africa
South Africa

South Africa’s civil confidence index of construction sector increased to 11 in the third quarter of 2020, up from the record low of 5 in the previous quarter, but still lower than the same period last year because of the COVID-19, said the First National Bank (FNB) on Tuesday.

The survey showed that the index rose from the depressed level of 10 in the first quarter of 2019 to 24 in the first quarter of 2020 before COVID-19 struck.

“Then, because of measures to curb the spread of COVID-19, activity came to a standstill in the second quarter and understandably confidence fell sharply,” said Siphamandla Mkhwanazi, property economist at FNB.

“It is disappointing now with the restrictions on construction sector activity lifted that confidence still remained this low in the third quarter,” he said, adding that ” essentially, all the confidence gains of the 12 months prior to the second quarter of 2020 have been wiped out.”

Mkhwanazi said the low confidence index was caused by the low demand for work in the sector which is expected to persist over a short term.

South African government imposed lockdown in March to curb the spread of COVID-19 and all construction projects came to a standstill. The government has said they will embark on infrastructural development post COVID-19 to reset the economy.

“There has been an increased focus about infrastructure development as a mechanism to boost economic growth post the pandemic. These results suggest that this has not yet translated into tangible opportunities for civil contractors. One can only hope that this will change and that work will pick up over the next few months or quarters because without it this sector will remain on the back foot,” said Mkhwananzi.

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