Better activity also supported overall profitability and with more work to go around, competition among contractors was also less keen, with the index measuring tendering price competition at its lowest since 2014.
Adding to the optimism is the upbeat outlook for work in the fourth quarter, Mkhwanazi says. “This is reflected in respondents’ own expectations and the decline in rating of the lack of new demand as a business constraint .” He says civil construction activity increased noticeably over the last few months on the back of investments in renewable energy, but also more tendering activity related to roads and water infrastructure in general.
“This boosted profitability and resulted in a meaningful reduction in tendering price competition. Encouragingly, there are signs that the level of activity will be maintained, at least over the short term. “However, given the sector’s reliance on public infrastructure spending, the recently recommended Treasury spending cuts could dampen some of the recent optimism. This is in addition to possible further generalised economic weakness,” Mkhwanazi says.The FNB/BER civil confidence index can vary between a maximum of 100, which indicates that all respondents were satisfied with prevailing business conditions and a minimum of zero, indicating that all respondents were dissatisfied.