By Evan Pickworth

Growth in building plans passed was hampered by decreased activity in the non-residential sector, independent analysts told I-Net Bridge on Wednesday.

Data released on Wednesday showed the seasonally adjusted year-to-date growth increased by 1.3% year-on-year (y/y), with non-residential building plans slowing the growth at 1.6% y/y. 

A different picture is, however, painted by the quarter-on-quarter numbers.

"The quarter-on-quarter (q/q) growth decreased by 2.5%, with non-residential growth helping to limit the extent of the slowdown on account of its rise of 9.6%. Q/q growth in residential buildings decreased by 8.5%, indicating that interest rate increases have had an effect on consumer spending," said the analysts.

The month-on-month (m/m) residential building plans passed decreased by 4.3%, slightly lower than July's figure of -6.5%.  

Non-residential building plans passed fell by 18.5% y/y in July, the lowest level in three months. However, additions and alterations increased by 0.4% in July. 

Building completions had a better month.

"The overall trend in buildings completed remains very positive, increasing by 19.9%. The y/y growth in the non-residential sector increased by 150.2%, indicating the highest growth this year. Residential also increased by 1.4%, but still remains at relatively low levels. Additions and alterations increased by 13.4%," said the analysts.

The year-to-date figure of non-residential building plans passed at current prices increased by 9.9%.

"Industrial and warehouse space contributed to the strong performance by rising by 8.7%. This growth is very encouraging as it indicates that the productive sector of the economy is showing signs of improvement," noted the analysts.   

"The shopping space segment decreased by 0.5%, this would tend to confirm that been a significant slowdown in consumer spending due to higher interest rates and National Credit Act introduced in June, which has translated in a reduced demand for such space. It was very surprising to see the growth in flats and townhouses increasing by 8.3 billion rand in 2007 compared to 7.3 billion rand in 2006," concluded the analysts.

I-Net Bridge