I would first like to wish everyone a Happy New Year. Together, we are ringing in the New Year with a fresh mindset, and it is with that mindset that we are beginning our first workday of 2018
Let new beginnings signify new chapter filled with pages of success and happiness, written by the ink of hard work and intelligence. May the New Year bring us more wonderful opportunities to work together.
Overview of the economic and business environment.
South Africa’s economy is forecast to tick up to 1.1% in 2018 from 0.8% in 2017, according to new data published by the World Bank.The bank reported in its annual global economic outlook for 2018 that the recovery is expected to solidify, as improving business sentiment supports a modest rise in investment. However, policy uncertainty is likely to remain and could slow needed structural reforms.
South Africa’s gross domestic product (GDP) rose by 2% in the third quarter of 2017, following an increase of 2.8% in the second quarter, StatsSA said in early December. The World Bank said that the country’s GDP is expected to grow 1.7% in both 2019 and 2010.
Market sentiment has improved since the appointment of Cyril Ramaphosa as leader of the ruling political party, the African National Congress, and amid speculation that Jacob Zuma will step down as president of the country, sooner rather than later. The rand has gained around 8% as investors bet Ramaphosa would push through business-friendly policies.
Parliament said it would meet soon to review its rules relating to removing the country’s president, after the constitutional court said on Dec. 29 lawmakers had previously failed to hold Zuma to account, further fuelling rumours of an early exit for the 75-year-old leader.
Growth in Sub-Saharan Africa is estimated to have rebounded to 2.4% in 2017, after slowing sharply to 1.3% in 2016. The rise reflects a modest recovery in Angola, Nigeria, and South Africa – the region’s largest economies – supported by an improvement in commodity prices, favorable global financing conditions, and slowing inflation that helped to lift household demand.
The report said however; growth was slightly weaker than expected, as the region is still experiencing negative per capita income growth, weak investment, and a decline in productivity growth.
The World Bank said that sub-Saharan Africa growth in the region is anticipated to pick up to 3.2% in 2018 from 2.4% in 2017. Stronger growth will depend on a firming of commodity prices and implementation of reforms. A drop in commodity prices, steeper-than-anticipated global interest rate increases, and inadequate efforts to ameliorate debt dynamics could set back economic growth.
Building Industry Update
STATS SA reports for the period January to October 2017 (compared with January to October 2016):
- The value of recorded Building Plans Passed by Large Municipalities at Current Prices, decreased by -4.2% or –R3.9 billion .
- Non-residential buildings fell by 19.4% -R4.8 billion
- Additions and alterations rose by 7. % R1.6 billion
- The largest negative contributions to the total decrease of 4.2% were made by Gauteng (-4.7% or –R4.3 billion), KZN (-2.0% or –R1.9 billion).
- The largest positive contribution was made by Western Cape (1.9% or R1, 5 billion).
- The value of buildings reported completed by Large Municipalities at current prices increased by (20.2% or R9.9 billion) during January to October 2017 compared with January to October 2016.
- The largest increase was recorded for non-residential buildings (41.4% or R5.5 billion), followed by residential buildings (12.7% or R3.5 billion) and additions and alterations (11% or R946 Million).
Four provinces reported year-on-year increases in the value of buildings completed during January to October 2017. The largest contributions were recorded for KZN (contributing 8.2% points or R4 Billion), Western Cape (contributing 7.5% points or R3.7 billion and Gauteng (contributing 7.2% points or R3.5 Billion).
Welcome to our new Executive Director!
Let me end by welcoming our new Executive Director Mrs Mariana Lamont who resumes her duties in January 2018. Please see the separate press release on her appointment
Please join me in wishing her all the best of luck in her new position.