Civil contractor confidence falls to historic low in Q3 – CIDB
16th October 2018
By: Marleny Arnoldi
Creamer Media Online Writer
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The Construction Industry Development Board (CIDB) small and medium-sized enterprises (SME) business conditions survey has shown that civil contractor confidence fell by six index points to a historic low of 27 during the third quarter.
Weakness in all the underlying indicators, especially construction activity, contributed to the drop in confidence.
Discouragingly, CIDB said, demand for new construction work remained a constraint and implied that activity growth was likely to remain under pressure in the near future.
From a grades perspective, confidence fell to historic lows of 25 and 15 for Grades 5 and 6, and Grades 7 and 8, respectively. Respondents in these grades experienced a sharp slowdown in activity, which weighed on profitability.
“Unfortunately, the outlook for this sector does not look promising, as the demand for new building work remains a constraint.”
She added that the third-quarter CIDB survey results suggested that pressure on smaller building contractors, in particular, is escalating. Since last year this time, business confidence for Grades 3 and 4 builders has dropped by a cumulative 19 index points to 28.
On a provincial level, the deterioration in sentiment for both general builders and civil contractors in the Western Cape was of particular interest.
“After outperforming other provinces for some time before this quarter, building and civil contractors in the Western Cape came under pressure, in line with other provinces.
The CIDB SME business conditions survey is conducted quarterly among Grades 3 to 8 CIDB-registered contractors (categorised into Grades 3 and 4, Grades 5 and 6 and Grades 7 and 8), both for the general building and civil industries.