Survey shows building confidence nudging up

MARIAM ISA

BUILDING confidence nudged up in the first quarter of this year, supported by an upswing in SA’s residential property sector, according to a survey released yesterday.

But the breakdown of this component of overall business confidence showed that the revival is still constrained by uncertainty, high levels of consumer debt and tight lending standards.

A building confidence index produced by the Bureau for Economic Research and First National Bank (FNB) edged up to 30, from 28 in the fourth quarter of last year.

But it is still well below the 50 cut- off point between expansion and contraction.

The level of c onfidence among nonresidential building contractors dropped to 26 in the first quarter from 30 in the fourth quarter, which was worse than expected.

Nearly 90% of respondents to that component of the survey, carried out last month, said they saw insufficient demand for building work as a major constraint affecting the viability of their business, FNB said in a statement.

Tendering competition remained tight, putting pressure on margins, said FNB property specialist John Loos. Too many shopping centres were built while the economy was booming, he said.

“Vacancy rates in industrial and office space are still rising — we must have a considerable slowdown in nonresidential development,” he told Business Day.

isam@bdfm.co.za