Value of Non-residential building plans passed rises highest in July 2013

Posted On Friday, 19 July 2013 07:46 Published by Commercial Property News
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The real value of building plans passed in larger municipalities rose by 21.9% year on year (y/y) in the first five months of 2013 after a 3.4% increase in 2012‚ Statistics SA (Stats SA) data showed on Thursday.

Building Plans Passed July2013
The biggest increase was reported for non-residential buildings (60,8% or R3 511,5 million), followed by residential buildings (25,3% or R3 044,7 million) and additions and alterations (12,7% or R1 064,0 million).
The surge in building passed is in contrast to perceptions in the industry‚ as the FNB/BER civil construction survey noted that the growth in construction activity remained subdued‚ although it was expected to rebound during the second quarter.
The FNB/BER building confidence index rose for the second consecutive quarter to its highest since 2010‚ gaining five points from 32 to 37 during the first quarter of the year.
This suggested that its current level meant more than six out of 10 respondents in different sectors of the building industry still rated prevailing business conditions as unsatisfactory.
Part of the problem is the long data lag as the end of May was seven weeks ago‚ while the last available cement data is for the end of 2012‚ which is now 200 days ago.
In the last century‚ cement sales data was available only a few days after the end of the month‚ but last year‚ the Competition Commission said the Cement and Concrete Institute could now only publish quarterly data more than 90 days after the end of the quarter‚ but as yet the first quarter data has not been released.
The long data lag makes it practically useless for economists trying to track government’s progress in fixed investment‚ especially after the events at Marikana on August 16 2012.
South African cement sales volumes rose by 2.9% in 2012 to 11.56 million tons. This compared with a 3.3% rise in 2011 and a 7.8% fall in 2010.
Cement sales volumes also rose by 2.9% y/y in the fourth quarter to 3‚030‚862 tons after falling by 3.8% y/y to 2‚976‚379 tons in the third quarter 2012‚ a 7.0% y/y increase to 2‚915‚120 tons in the second quarter 2012 and a 6.7% year y/y climb to 2‚637‚349 tons in the first quarter 2012.
If the third quarter data is adjusted for the number of sales days‚ then the y/y decline was only 0.7%‚ which would have been useful information for the ratings agencies had they had the information when they decided to downgrade SA’s credit rating last year.
The Competition Commission also only allows the institute 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 real value of buildings completed rose by 10.0% y/y in the first five months of 2013 after a 0.5% decline in 2012.
As construction is a labour intensive industry‚ data with a minimal lag would be useful in seeing whether the economy was creating jobs and where‚ as many job seekers do not know where to look for jobs and needlessly use up savings to search for jobs where none exist.
Last modified on Friday, 19 July 2013 08:24

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