Construction & Real Estate

South Africa Construction and Real Estate

The construction sector benefits from strong fundamentals but has grappled recently with a slowdown in big-ticket infrastructure work and falling margins, prompting some firms to focus their efforts outside of their home turf. However, this has helped to stoke growth in smaller and newly established contractors. While significant infrastructure spending has been planned for the medium term, order books, while busy, have yet to provide the dramatic rebound that has been hoped for. Despite the lingering uncertainty, there are signs that momentum is swinging in a positive direction. A number of state-owned enterprises, for example, are beginning to implement and break ground on projects that for years have stalled at the discussion and planning phase.

South Africa’s property market appears to be in a healthy place, demonstrating solid if not necessarily exceptional growth. However, there are exogenous pressures that could hamper demand, including a sluggish economy, eroding business and consumer confidence, escalating running rates, in addition to interest rate hikes, but these could serve as factors that will keep growth in check and temper the market from becoming over-exuberant. The scope for potential growth varies, unsurprisingly, but broadly speaking the outlook for the near term is fairly robust.

This chapter contains interviews with Henry Laas, CEO, Murray & Roberts; and Louis van der Watt, CEO, Atterbury Group