By Helmo Preuss

The real value of building plans completed as reported by larger municipalities rose by 7.2% year on year (y/y), according to Statistics SA (Stats SA) data released on Thursday. The real value of building plans passed however declined by 12.4% y/y.

The increase in the real value of buildings reported as completed in January was due to a 49.7% y/y surge in non-residential buildings, while residential buildings showed a 6.5% y/y rise as opposed to a 17.7% y/y decrease for additions and alterations.

The decrease in the real value of buildings plans passed in January was due to a 58.6% y/y slump in non-residential buildings, while residential buildings showed an 18.8% y/y rise with additions and alterations increasing by 9.3% y/y.

Lumpy non-residential building plans such as shopping centres tend to lead to a volatile monthly series, so it is better to look at the seasonally adjusted annualised three-month series.

This showed that the real value of building plans completed grew by 32.5% in the three months to end January compared with the prior three months, while building plans passed increased by 30.6% over the same period.

The building plan data is supported by the cement sales volumes data released by the Cement and Concrete Institute (CNCI). These showed that cement sales soared by 22.0% y/y in January to 779,003 tons.

The Competition Commission only allows the CNCI to report a national figure, not the regional or product detail. The detail would allow economists to better see how much of the cement sales are going into the new power stations, mines, dams and residential buildings in rural areas, none of which is reported by Stats SA when they release the building plan data for larger municipalities.

The January 2012 cement sales data is merely the latest in a string of strong y/y increases. The increase in the past five months (September to January) was 10.5% y/y with the November 2011 tonnage sold of 1,141,248 the highest monthly total since 2008.

Source: I-Net Bridge