The First National Bank (FNB) and Bureau For Economic Research (BER) building confidence index increased by seven index points to 48 in the third quarter of 2013, from 41 in the second quarter.

This is the highest level of the index in five years.

The current level indicates that there is an even split between those respondents satisfied with prevailing business conditions and those that are not.

After jumping by 15 index points to 45 in the second quarter, the confidence of main contractors declined slightly to 43 in the review period. However, the growth in building activity slowed down considerably compared to the preceding quarter.

"This does not mean that the building recovery has stalled. The underlying trend is up. However, it seems that growth was more subdued in the third quarter of 2013, following a relatively good second quarter," said FNB chief economist Sizwe Nxedlana.

The slowdown in activity was more pronounced in the nonresidential sector than in the residential sector.

The index can vary between zero — indicating an extreme lack of confidence — and 100, indicating extreme confidence.

Compared to the second quarter of 2013 the following changes in confidence levels took place: manufacturers of building materials (+25), retailers of building materials (+10), quantity surveyors (+7), architects (+4), main contractors (-2) and subcontractors (-2).

Despite the rise in confidence in the review period, other indicators, especially main contractor activity, suggested that the growth momentum in the building sector returned to the more subdued pace seen in the first quarter of 2013 and was mainly based on smaller, informal projects, Mr Nxedlana said.