BUILDING: World Cup Brings Down Building
Recent Western Cape Business News
The building industry has had a major slowdown in the past three months due to the Soccer World Cup says international credit insurer Coface South Africa.
“But post-World Cup infrastructure development will continue because there are many projects yet to be completed. Many of which have been put on hold during the World Cup,” says Jayson Naidoo, industry analyst at Coface South Africa.
The ‘Building of the Nation’ through the unity resulting from the World Cup will have significant longer term impact,
In the first half of 2010, infrastructure and residential development slowed and projects were put on hold due to the World Cup.
Some large construction companies have had employees working half days during the World Cup which has had an impact on productivity.
Post World Cup will see a return to productivity and a completion of World Cup-related projects such as roads and rail. Employment may improve due to these projects starting up again.
“Foreign investment through the World Cup exposure will have an impact on this sector going forward.”
“We are hopeful that this sector, and especially infrastructure development, will improve in the next six months due to government’s current R846-billion budget. But we will only be able to see this once productivity levels return post World Cup,” he says.
Infrastructure spending on economic services, including the provision of electricity, roads, pipelines, bulk infrastructure for water and sanitation and housing, accounts for 85,3%, or R720-billion of the R846-billion spend, while 11,3%, or R93-billion of the total are to be spent on social services, including schools and hospitals.
Residential growth in new housing has begun again and home renovations continues to be an active sector. But in the residential sector’s slow movement is expected to continue due to high level of unemployment, and banks’ lending criteria will continue to dampen residential consumer spending.
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