The second quarterly report on the state of the civil engineering industry paints a sad picture of the domestic construction market, forecasting an equally gloomy outlook for both sectors over the next 12 months.

The latest South African Federation of Civil Engineering Contractorsreport shows there was no real growth in the industry last year. It forecasta real decline of 16%.

The appreciation of the rand and political uncertainty during the April14 general election were among the factors blamed for weak construction demand.

The report stated that employment had dropped about 7% in the year to March, but did not give actual figures.

Some commentators have said that more than 5000 jobs had been lost inthe construction sector over this period.

The poor state of affairs was reflected in the civil industry's turnover,which dropped about 15% in the six months to March.

Tough conditions in SA had driven construction companies north of thecountry's border.

"Civil engineering turnover generated across our border is in the regionof 40% of locally generated turnover, a very high figure," says the report.

The short-term outlook for the construction industry in SA was negative,but longer-term prospects were bright. "The spin-offs from the successfulworld cup soccer bid will impact positively in the industry."

The March Quarterly Bulletin indicated a 10% increase in total constructionwork compared with the same quarter last year. This was mainly supportedby expansion at the platinum mines and cellular phone infrastructure.

But the federation said the figure was misleading, as the increase comprisedmainly structural and mechanical components of construction work .