Confidence in the building sector remained under pressure at the start of 2026, with sentiment slipping slightly as activity in parts of the industry continues to battle for momentum.
The FNB/BER building confidence index shows that nearly 60% of respondents across the building sector value chain remain dissatisfied with prevailing business conditions.
Sentiment improved among contractors and consultants in the first quarter. Confidence among main contractors rose by 11 points, while quantity surveyors and subcontractors gained seven and five points, respectively. However, sentiment weakened among architects, manufacturers of building materials and hardware retailers.
“Despite the interest rate cuts over the last year and a half, the recovery in demand for residential buildings is yet to mature. Meanwhile, other interest rate sensitive sectors in the economy, such as vehicle sales, are doing very well,” said FNB senior economist Koketso Mano.
Excluding building material manufacturers and hardware retailers, confidence in the “core” building sector rose to its highest level since 2023, alongside a modest increase in work volumes.
Despite the interest rate cuts over the last year and a half, the recovery in demand for residential buildings is yet to mature.
— Koketso Mano, FNB senior economist
However, the results again highlight the strain facing residential builders, with activity and profitability softening while order books remained relatively weak.
Meanwhile, the results were more upbeat in the non-residential sector, where confidence jumped to the highest level in 18 years. The improvement was largely driven by a sharp increase in work among building subcontractors, including painters and electricians.
“This continued improvement in non-residential building activity is in step with the somewhat better property dynamics. In the office market, for example, vacancy rates are easing, which is often paired with retrofitting and renovating existing space to accommodate new tenant preferences,” Mano said.
Additionally, shopping centres are increasingly investing in their own electricity and water supply, a move that highlights some of the key demand drivers currently underpinning the non-residential building sector, she said.
“Average activity among architects rose notably in the first quarter of 2026, suggesting better building activity could continue in the months ahead. Quantity surveyors also saw improved activity, though levels remain below the long-term average, with confidence readings of 42 and 43 for architects and surveyors, respectively,” Mano said.
Not all segments shared in the optimism. Business confidence among hardware retailers fell to 43 in the first quarter, down from 57 in the final quarter of 2025, despite strong underlying sales and upbeat expectations for the coming months. Building material manufacturers faced similar headwinds, weighed down by weaker domestic and export sales, along with lower productivity.
Overall, the data points to a building sector in flux. Gains in non-residential projects and professional services are being offset by persistent pressures in residential construction and parts of the supply chain, underscoring the uneven pace of recovery across South Africa’s industry.
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