South African construction index expands

Afrimat has released the findings of its Afrimat Construction Index (ACI) for the 4Q23. The ACI is a composite index of the level of activity within the South African building and construction sectors and is compiled by economist Dr Roelof Botha on behalf of Afrimat.

According to Dr Botha, the lethargy of the economy as a whole during the fourth quarter of last year was evident in the construction sector, with five of the 10 constituent indicators of the ACI recording QoQ negative real growth rates and the ACI dipping by 1.2 per cent as a result. 

“However, viewed YoY the ACI expanded and even outperformed the economy with three per cent real growth rate, compared to real GDP growth of 1.2 per cent. The YoY growth rate was mainly due to exceptionally strong performances by the indicators for employment and wholesale sales of construction materials.”

Dr Botha says that the YoY basis expansion of the ACI is encouraging, especially against the background of the high cost of capital in South Africa, adding that it was especially encouraging that the important indicator of job creation expanded in 2023, with 110,000 new jobs having been created, compared to 31,000 in 2022. 

The index recorded a level of 118.9 in the fourth quarter of 2023, compared to 120.3 in the 3Q23, and 116 in the second quarter.