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FNB's building confidence ticks up
In the case of building contractors, confidence levels remained unchanged during the survey quarter.
Although the business confidence of residential building contractors remained stable in the fourth quarter of 2007, a closer inspection of the survey data revealed that business conditions deteriorated notably during the past quarter.
Bruggemans says the growth in building activity turned out well below expectations. The tighter demand conditions reported by the respondents to the survey resulted in an escalation in tendering competition when trying to procure new work. As a result, profit margins are under pressure and the survey results reveal that the overall profitability of companies is deteriorating. Expectations are that this trend is likely to continue in the first quarter of 2008.
With building demand for residential space weakening, the lower levels of building activity forced survey respondents to reduce the number of people employed. In this regard, a net 11% of participants indicated that the growth in employment has slowed and further job shedding is expected to take place over the short-term.
Overall, the respondents to the survey indicated that business conditions were likely to remain tight and they expect a further deterioration in the first quarter of 2008.
The FNB Building Confidence Index measures the business confidence of all the major role players and suppliers involved in the building industry such as architects, quantity surveyors, contractors, sub-contractors, wholesale and retail merchants, and manufacturers of building materials.
The index is compiled quarterly from building, manufacturing, retail and wholesale opinion surveys undertaken by the Bureau for Economic Research (BER) at Stellenbosch University. The BER business survey in the building industry was conducted between October 22 and November 16, 2007. |
Posted on Thursday, December 13, 2007 (Archive on Monday, December 31, 2007)
Posted by hayleym Contributed by hayleym
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