Lack of demand blamed for drop in non-residential building confidence (4th quarter 2009)
Tuesday, 8th December 2009The FNB Building confidence index deteriorated again in the 4th quarter, after reporing a mild improvement in the 3rd quarter. The index fell from a value of 32 in the 3rd quarter to 28 in the 4th quarter. Confidence levels deteriorated amongst architects, quantity surveyors, building contractors and building material manufacturers. Retailers of building materials and sub-contractors were however slightly more optimistic. The confidence survey suggests a bottoming out in the residential market, but sluggish performance in the non-residential sector. The confidence levels of residential contractors improved for the second consecutive quarter and a level of 21 was recorded in the 4th quarter. On the upside, profitability is no longer deteriorating at the pace experienced in the past while employment levels were also reported to have stabilised. Although residential contractors are optimistic that conditions will improve in the 1st quarter of 2010, we are not convinced that there is sufficient evidence of new residential pipeline work to facilitate any significant recovery in the first quarter of 2010. Confidence levels of non-residential contractors fell to 30 in the 4th quarter (from 33 in 2009Q3), with an increasing number of contractors blaming "lack of demand" as the main reason for poor business conditions.
Source: FNB
Previous page
