Boost infrastructure projects to aid sector, government urged

CONFIDENCE among civil contractors has dropped at the close of this year, with 85% dissatisfied with prevailing business conditions.

This is despite improvement in key indicators such as activity and profitability in Q4, according to the latest FNB/BER Civil Confidence Index.

And senior FNB economist Siphamandla Mkhwanazi says it is difficult to pinpoint the reasons behind this “persistently weak level of confidence”.

“One possible qualification is, although the growth in activity is somewhat better this quarter, compared to a few years ago, the total value of construction activity is still much lower.”

But, looking ahead, he says there are signs that activity could improve, albeit only slightly. “Respondents noted that there is indeed an improvement in tender activity. However, tender awards are lagging significantly, and the validity of tenders is increasingly being extended. This means that, while there is interest, not all projects will be realised, or at best, be commissioned in good time.”

Mkhwanazi says accelerating the roll-out of infrastructure projects by the state and further progress on structural and regulatory reform to boost private sector infrastructure spend would “go a long way to alleviate the woes in this sector”.

The roll-out of infrastructure projects will help improve business conditions for civil contractors. PICTURE: DIMPHO SAMETSI/PIXABAY