Abstract
In time for the launch of BMI's infrastructure Q109 reports, we have revised our construction data. The
data has been modified from 2008 onwards. This initiative stems from new methodology being
introduced in our forecasting method and aims to increase the relevance and reliability of BMI's
infrastructure data. BMI strives to be able to offer five-year industry forecasts for the South Africa Q109
reports however that data is not currently available, but it will be updated in time for Q209. BMI
therefore will make its predictions based on data sets from 2009-2012.
For 2009 BMI forecasts that South Africa's construction industry will be worth ZAR72.99bn
(US$8.74bn). The sector's value is forecast to continue increasing and we expect it to be worth
approximately ZAR110.59bn (US$13.45bn) in 2012. We note that the growth of the country's
construction sector is set to continue its decrease from its peak growth in 2007, when it grew by 19.21%.
In 2009 we forecast that South Africa's construction industry will grow by 8.22%, this growth is set to
slow toward the end of the forecast period with the sector predicted to grow by just 5.76% in 2012.
South Africa's construction industry makes up a relatively small part of the country's overall GDP. The
sector is forecast to make up just 2.94% of the total, but this percentage is growing and the South African
construction industry is set to make up approximately 3.27% of GDP in 2012. The construction industry
is an important employment area for the population of South Africa. In 2009 the number of labourers in
the sector is forecast to stand at 1.5mn and make up 11.22% of the country's total work force.
BMI believes that the construction sector, not just domestically in South Africa, but worldwide will be
buffeted by the global economic downturn and will lead to investors tightening their belts, leaving less
money to go towards funding infrastructure related projects, especially those in the real estate sphere.
This could see a serious decline in the number of companies available to participate in Private Public
Partnership (PPP) projects, which will lead to delays and in some case cancellations of proposed
infrastructure schemes.
In relation to South Africa, BMI has no news of specific projects that may be affected by the economic
downturn, it could be a case of watch this space. BMI however is confident that the big infrastructure
projects launched in 2008, especially those that have been implemented to boost the country's power
output and construction work associated with South Africa's role as host for 2010 World Cup. BMI notes
that South Africa cannot allow power projects to fall through as the country will only prolong its power
deficit and lengthen the need for load shedding.
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