Value of projects awarded up by 63 per cent

Despite a dismal performance in the economy, the estimated nominal value of construction projects awarded increased by 63,3 per cent in July 2015 compared to July last year, supported by a broad base increase across all market segments.

The civil sector recorded a 138, 0 per cent increase, while the value of building projects awarded rose by 25,0 per cent during the same period.

The strong increase in civil projects was due to several big water and road projects that were awarded mainly in Gauteng and the Western Cape as well as a big water project in Limpopo.

One notable road project is the rehabilitation of the road through Cogmanskloof between Ashton and Montague with an estimated construction value of R583 million. Other projects that drove up the value of civil awards are two big water projects in Gauteng, in particular the construction of the new reservoir and new sediment plant at the Zuikerbosch pumping station, both with an estimated value R490 million.

Based on a rolling 12 month average, the real value of construction projects awarded during July registered a decline of 6,0 per cent in real terms. The value of building projects awarded are still down by 17,1 per cent compared with an 10,8 per cent in the value of civil projects over the last 12 months.

With reference to the graph on the left, it is apparent that while the overall trend over the last year in terms of the value of building projects awarded is declining, civil projects have seen moderate growth over the last few months.

The annual rate of decline (measured over the last 12 months) in the number of projects out to tender again declined to -19.4 per cent in July, which is worse than the figure of -18.7 per cent in June. The number of civil projects out to tender declined by 20.9 per cent y-y in July, from 20.2 per cent in June, while the number of building projects (excluding education) declined by 15.4 per cent y-y in July from a decline of 14.4 per cent in June.

Postponement rates have been reaching worrying levels lately with the trend of postponements on the incline since October last year. The total postponement rate in July flattened out somewhat declining to 11 per cent from 11.1 per cent in June.

Source: Industry Insights

Error loading MacroEngine script (file: news-sidebar.cshtml)