Market Research Report
Construction in South Africa - Key Trends and Opportunities to 2025 (Q3 2021)
|Construction in South Africa - Key Trends and Opportunities to 2025 (Q3 2021)|
Published: September 30, 2021
Content info: 55 Pages
Delivery time: 1-2 business days
GlobalData has revised down the estimated growth for South Africa's construction industry in 2021, with the industry now expected to grow by 4.6% in real terms this year, from the earlier estimate of 6.2%. This downward revision is attributed to the third wave of the Coronavirus (COVID-19) pandemic, and the subsequent tightening of restrictions to contain the spread of the highly contagious Delta variant of the virus. According to Statistics South Africa (Stats SA), the construction industry's value add fell by 2.9% year-on-year (Y-o-Y) in the first half of this year (H1 2021). Although the industry returned to growth in Q2 2021, the expansion mostly reflects the low base effect during the same period of last year. In the second half of this year, the industry's output will be supported by the gradual recovery in investor and consumer confidence amid the relaxation of COVID-19 restrictions, coupled with the rise in building plans passed for residential buildings. However, the civil unrest which erupted in July 2021 is expected to have affected manufacturing and export activities, thereby weighing on investor confidence.
The industry is expected to register an annual average growth of 4.1% between 2022-2025, supported by investments on transport, energy, residential, water, telecommunication, health and education projects. In the latest budget unveiled in February 2021, the government announced a plan to allocate ZAR791.2 billion (US$49 billion) towards public-sector infrastructure spending over the Medium-Term Expenditure Framework (MTEF) period, which runs from the Fiscal Year (FY) 2021/2022 (April 2021 to March 2022) to FY2023/2024. Of the total, it allocated ZAR287 billion (US$17.8 billion) towards the transport and logistics sector, ZAR149.9 billion (US$9.3 billion) towards the energy sector and ZAR120 billion (US$7.4 billion) towards the water and sanitation sector, among others.
Over the long term, the industry's output will be supported by investments on the 10-year ZAR2.2 trillion (US$133 billion) infrastructure plan unveiled by the government last year. The plan comprises 276 projects in various sectors, including transport, energy, housing and water. Of the total, ZAR1 trillion (US$62 billion) will be spent over the next four years alone. The industry's output over the long term will also be supported by the government's plan to produce 26% of the total electricity from renewable energy sources by 2030. To achieve this goal, the state-owned electricity public utility company Eskom plans to invest ZAR106 billion (US$6.6 billion) on the construction of wind farms and solar plants until 2030.
GlobalData's Construction in South Africa - Key Trends and Opportunities to 2025 (Q3 2021) report provides detailed market analysis, information and insights into South Africa's construction industry, including -
This report provides a comprehensive analysis of the construction industry in South Africa. It provides -