2014-01-05 23:07:53 - New Construction research report from Business Monitor International is now available from Fast Market Research
South Africa's construction industry looks set to grow in line with our forecasts for 2013 as our view that the industry's post-World Cup slump finally reached a bottom in 2012 and timidly returned to growth has played out. In light of officially revised data for the previous quarters of 2013 we are tweaking our forecast for real growth in the full year upwards to 2.2% from 1.9% as the industry historically finishes strongly in the last quarter. We maintain the view that we will see a cautiously positive growth story over our forecast period. We see annual real growth averaging 3.8% between 2014 and 2018 with downside risks remaining prevalent - namely difficulty in raising capital for projects, currency fluctuations,
social unrest and poor policy making.
Full Report Details at
- www.fastmr.com/prod/759156_south_africa_infrastructure_report_q1 ..
Despite still lagging behind its regional peers in terms of growth rate, it is important to note that South Africa's construction industry has begun its recovery after the collapse following the World Cup in 2010. Following the 2010 World Cup government finances were pushed to the limit in order to complete projects on time. Hence, a drawback in funding and subsequent activity was noticed almost immediately after the tournament. Real growth decelerated from 7.8% year-on-year (y-o-y) in 2009 to 0.9% y-o-y in 2010. We are now seeing a return to sustainable growth, noting that levels are unlikely to ever return to those seen before the World Cup, as they were driven by an artificial stimulus and a front-loading of the project pipeline.
We are seeing a gradual improvement within the wider South African construction sector, although there are still substantial headwinds. This has been underscored by the measured improvements seen in the performances of numerous South African construction companies. Hence, our outlook for the country's construction sector is one of cautious and modest growth, with a forecasted average annual growth of 3.8% between 2014 and 2023.
Many of the grand infrastructure programmes proposed by President Zuma draw upon huge capex schemes by the country's state-owned infrastructure operators, including Eskom, Transnet, Prasa and Sanral. They all have multi-billion dollar plans in the pipeline; but, financing has proved to be a major obstacle and continues be so. Eskom and Transnet have made progress in issuing bonds to raise capital, but Sanral in particular continues to struggle with huge debts, which threatens investment into the road sector. The rail and port sectors are a key source of growth in our forecasts as Transnet has front loaded its spending plans with huge capacity expansion projects, for examples a new dug-out port in Durban.
With little government funding available, huge sums continue to be required from international financial sources. For this reason, investment is far from assured and thus we have refrained, especially given the weakness of the rand in light of the emerging market currency sell-off, from incorporating the entirety of the investment plans into our forecasts for the sector.
Report Table of Contents:
BMI Industry View
- Construction And Infrastructure Forecast Scenario
- Table: South Africa Construction And Infrastructure Industry Data 2011-2016
- Table: South Africa Construction And Infrastructure Industry Data 2017-2022
- Transport Infrastructure - Outlook And Overview
- Table: South Africa Transport Infrastructure Industry Data 2011-2016
- Table: South Africa Transport Infrastructure Industry Data 2017-2022
- Transport Infrastructure Outlook
- Major Projects Table - Transport
- Table: Major Projects - Transport
- Energy And Utilities Infrastructure - Outlook And Overview
- Table: South Africa Energy & Utilities Infrastructure Industry Data, 2011-2016
- Table: South Africa Energy & Utilities Infrastructure Industry Data, 2017-2022
- Energy And Utilities Infrastructure Outlook And Overview
- Major Projects - Energy & Utilities
- Table: Major Projects - Energy And Utilities
Residential/Non-Residential Building - Outlook And Overview
- Table: South Africa Residential/Non-Residential Industry Data 2011-2016
- Table: South Africa Residential/Non-Residential Industry Data 2017-2022
- Residential/Non-Residential Building - Outlook & Overview
- Major Projects Table - Residential/Non-Residential Building And Social Infrastructure
- Table: Major Projects
Industry Risk Reward Ratings
- South Africa - Risk/Reward Ratings
- Sub-Saharan Africa - Infrastructure Risk/Reward Ratings
- Table: African Eurobonds
- Table: Sub-Saharan Africa Infrastructure Risk/Reward Ratings
- Competitive Landscape
- Table: EQS Data
- Murray & Roberts Group (M&R)
Global Infrastructure Overview
- Global Industry Overview
- Table: Latin America PPP Round-Up
- Industry Forecast Methodology
- Sector-Specific Methodology
- Risk/Reward Rating Methodology
- Sector-Specific Methodology
- Table: Infrastructure Risk/Reward Rating Indicators
- Table: Weighting Of Indicators
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