Stronger hardware sales helped lift building sector sentiment in the final quarter of the year, with the FNB/BER building confidence index rising to 43 from 35 in the previous quarter, the highest level recorded in more than a decade.
According to the index, the improvement was driven largely by hardware retailers, where confidence increased by 21 index points as sales improved. This uptick pushed the overall index above its long-term average of 40.
“The jump in hardware retailer confidence returns the index to more or less the level registered at the start of the year and reaffirms some of the broader trends regarding the resilience of the South African consumer,” said FNB senior economist Siphamandla Mkhwanazi.
Mkhwanazi said household income has benefited from lower inflation, lower interest rates — including the November cut, though it is too soon for that to add to sales but potentially to sentiment — and continued two-pot withdrawals.
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Business confidence among manufacturers of building materials also rebounded, rising 14 points. Main contractor confidence slipped to 39 from 46, despite stronger activity and profitability.
Residential building growth was moderated by tighter tendering price competition, leaving overall confidence largely unchanged. Non-residential builder confidence held steady at 50, with weaker activity offset by gradual investment momentum, which remains below levels recorded in the 2010s.
Still, the sector remains under pressure. With the index below the 50 point threshold, more than 55% of respondents continue to view prevailing business conditions as unsatisfactory.
That weakness is echoed in the latest Afrimat construction index, which shows activity improving in most areas but still uneven. Nine out of 10 indicators posted quarter-on-quarter growth, but the real value of construction work failed to rise.
“The slow pace of capital formation, which relies heavily on construction, is a concern given the urgent need to repair and expand infrastructure, especially roads, water and sewage,” said compiler of the Afrimat index, Roelof Botha.
Tthough stronger hardware sales gave the building confidence index a lift in the final quarter, Cashbuild’s integrated annual report for 2025 shows the building materials market remains under pressure amid ongoing local and global uncertainty.
“Lower-income consumers in South Africa continue to feel the pinch, even as the economy shows signs of stabilising. Inflation eased from an average of 6% in 2023 to 4.4% in 2024, but rising costs for essentials such as food, utilities and transport continue to erode disposable income,” the report notes.
Lower-income consumers in South Africa continue to feel the pinch, even as the economy shows signs of stabilising.
— Report
Cashbuild said cement remained its top-selling product, reflecting its key role in residential construction. Industry reports also point to solid growth prospects for cement, backed by planned government infrastructure projects.
Sentiment among architects rose eight points in the fourth quarter, driven by better business conditions and activity. In contrast, quantity surveyor activity plunged, though business confidence remained stable. Subcontractor sentiment also improved, reflecting mixed but broadly positive activity along the building value chain.
“The building pipeline provided mixed results in terms of upcoming work and suggests that there is at least some activity likely to move along the value chain,” said Mkhwanazi.
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