The construction industry is gaining momentum, with the Afrimat construction index showing improvement for a third consecutive quarter — the first time this has happened since the pandemic lockdowns.
The latest index findings, for the fourth quarter of 2024, confirm a steady rebound to prepandemic levels, reinforcing confidence among builders, developers and investors.
“In SA, the first quarter is usually weak for most sectors, while the fourth quarter benefits from events like Black Friday and Christmas bonuses, boosting economic activity. In construction, firms work hard to meet deadlines before shutting down on December 16, making the fourth quarter stronger,” said Roelof Botha, who compiles the index.
Botha believes the construction sector is on a strong growth path, with the index’s year-on-year rise of 2.5% outpacing real GDP growth of just 0.5%. He said cuts in the repo rate in November and January had provided a slight boost to the index.
The latest index shows five of the 10 indicators experienced year-on-year growth. Notably, four of the top five ranked indicators had remained among the top performers from the previous quarter.
The biggest winners on a year-on-year basis were building plans passed by metros and larger municipalities (6.8%), value of building materials produced (6.7%), value of building material sales (5.4%), employment in construction (2.8%) and wholesale trade sales of construction materials (2.5%).
The sector saw employment grow to 1.35-million — a return to pre-Covid levels.
A factor in the job creation was growing optimism fuelled by better collaboration between the private and public sectors, Botha said. While the private sector was doing relatively well, state-owned enterprises (SOEs) were still struggling, dealing with the aftermath of state capture.
Afrimat CEO Andries van Heerden said that the upswing in the index boded well for the sector.
“Afrimat remains poised for growth with capacity to supply any improvement in the sector. We have bolstered our long-term growth strategy by expanding a well-chosen asset base in the mining, quarrying, cement and related industries, with the integration of Lafarge SA now complete,” Van Heerden said.
He said Afrimat employed 3,875 people, after the Lafarge acquisition, with 228 new hires completed in the past six months.
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