Construction activity declines in the first quarter due to high rainfall in four provinces

CONSTRUCTION industry activity in the first three declined due to high rainfall and no meaningful impact from the marginal drop in the prime overdraft rate since September, according to findings of the first quarter, Afrimat Construction Index (ACI).

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The ACI is an index of the level of activity within the building and construction sectors, compiled by economist Dr Roelof Botha and commissioned by the mid-tier mining company that produces and supplies construction materials, iron ore, anthracite, phosphate, and industrial minerals, Afrimat.

The year-on-year comparison with the first quarter of last year in the ACI showed a decline of 2.6%. Dr Botha said he believes the reading is an accurate reflection of the government's lack of willingness to spend on economic assets.

“Following a sharp drop during the pandemic, the ACI recovered swiftly to within a whisker of its pre-COVID level, but the recovery was then stymied by inadequate fiscal support for infrastructure expansion and the hangover from the state capture era, where the effectiveness of key State-owned enterprises and public sector agencies was eroded. Over two years, these problems have been exacerbated by the South African Reserve Bank's restrictive monetary policy,” said Dr Botha.