Experts predict civils will remain in the doldrums for 2018
Aug 3, 2018 | Construction, News |
Civil engineering, along with the rest of the construction sector, will remain in the doldrums for 2018 with hopes for some improvement to begin next year. This is according to Industry Insight senior economist David Metelerkamp.
Metelerkamp, who was speaking to construction industry stakeholders at a recent at a recent AfriSam breakfast briefing, said that the civils sector was bearing the brunt of the construction downturn, and companies reported the worst levels of confidence since the early 1990s.
“Over the last 18 months, there has been a significant decline in the value of tenders awarded,” he said, pointing to a 26% decrease in the value of projects over the past year.
The civils sector had experienced poor annual growth levels for many years up to 2016, after which its performance had worsened further with five consecutive quarters of negative growth.
Good news in store as elections loom
He highlighted that order books across the civils sector remain flat, and even dropped in recent months, possibly as a result of President Cyril Ramaphosa’s planned clean-up of the state-owned enterprises which had in some instances delayed expenditure. But he saw more efficient SOEs as a positive factor in the medium to long term for civils.
“Conditions will remain tough this year, which will possibly be the worst year for the civils sector,” he said, “but we are expecting some improvement next year and the following year.”
There might also be good news in store as the next national election looms, with an election run-up often coinciding with the issuing of more government tenders.