First quarter statistics show the construction industry has recovered from last year’s Covid-19 related lockdowns, well-known economist Dr Roelof Botha said yesterday.
Dr Botha said the Afrimat Construction Index (ACI) had climbed 5.4% in the first quarter of 2021, compared with the pre-Covid first quarter of 2020, while in comparison, GDP had declined 3.2% over the same time period.
The year-on-year index level in the first quarter was even more remarkable, considering there were tighter lockdown restrictions in January, said Dr Botha.
He said while the index showed that the construction industry was “around where it was pre-Covid”, levels of activity, however, remained low in the sector due to the unmet needs for infrastructure and housing development in the country, which he said had been exacerbated by the collapse of municipalities.
Quarter-on-quarter, the ACI fell by 5.6%, but this was a seasonal decline and reflected an uptick in activity in the industry every fourth quarter as contractors worked to avoid penalty clauses in contracts, to finish their work leave period, and because DIY activity also picked up in the fourth quarter.
One area of optimism was a significant recovery of the value of building plans passed by larger municipalities, which acts as a leading indicator for future building activity.
Dr Botha added that the lifting of most of the lockdown regulations that had been in place during the second quarter of 2020 had resulted in a V-shaped recovery for most key sectors of the economy, including construction, although the effects would linger.
