Just Published: "South Africa Infrastructure Report Q3 2016".
South Africa's construction market has entered into a period of subdued growth as macroeconomic and operational headwinds weigh on business confidence and limit productivity in the sector. We expect rail and renewable energy sectors to post the most solid performance, with improved freight logistics and a more stable power supply crucial to economic growth. Support will also stem from the continued implementation of the low-cost housing programme.
Forecast & Industry Developments
We are maintaining our forecast for 1.6% real growth over 2016 and annual average growth of 2.2% in real terms over the next five years up to 2020. Nominal industry value will rise from an estimated USD11.2bn in 2015 to USD15.5bn in 2025, keeping it as one of the largest construction markets in Sub-Saharan Africa.
We expect rail investment plans to take shape over our forecast period, with parastatal Transnet in a solid financial position to execute its key projects and the government eager to overcome bottlenecks in the country's freight logistics network.
Full Report Details at
New and proposed policies extending the state's power into investment and land matters are eroding business confidence in the sector, which is already poor in light of the weakening rand and subdued commodities outlook.
South Africa's Infrastructure RRI score is 50.4, making it the third most attractive market to do business in Sub-Saharan Africa out of 17 countries in our Index.
Frequent labour strikes and electricity shortages weigh heavily on firms' productivity and are key deterrents to entering the market.
The new Protection of Investment Act passed in 2015 will provide additional barriers to market entry, favouring domestic private firms and international firms with an established presence in the industry.
The South Africa Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's South Africa Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the South African infrastructure and construction industry.
Benchmark BMI's independent infrastructure industry forecasts for South Africa to test other views - a key input for successful budgetary and planning in the South African infrastructure market.
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|Date:||Jul 19, 2016|
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