July 2023 Construction Trends in South Africa

  • July 2023 Construction Indices: Notable changes include a 3.6% rise in ironmongery, 6.2% growth in construction pipes, and -6.1% drop in aluminum roofing.
  • Construction Input Prices: Stable overall, with a 6.2% surge in construction pipes and a -9.5% slump in builders' carpentry.
  • Plant & Equipment Prices: Plant and equipment index increased by 10.5% annually, suggesting substantial industry growth in July 2023.
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In the world of construction and engineering, numbers tell the story of an ever-evolving industry. As we delve into the July 2023 data, we uncover the noteworthy month-on-month changes in various South African construction and engineering price indices. These indices serve as crucial indicators of the economic trends within these sectors.

Construction Price Adjustment Provisions (CPAP) Work Group Indices

Work Group 132 – Ironmongery

The ironmongery sector saw a significant upswing in July, with the index surging by 3.6%. A crucial contributor to this increase was the remarkable 4.2% change in the Producer Price Index (PPI) for locks and padlocks, clasps, keys, and related base metal parts. These components accounted for a substantial 78.0% of this work group’s index. This shift suggests potential growth and activity in the ironmongery sector.

Work Group 146 – Drainage

The drainage sector also experienced a notable increase, with its index rising by 2.9%. This surge can be attributed to a substantial 6.2% change in the index for construction pipes, tubes, and fittings, which make up 40.0% of this group’s index. It indicates an increased demand for drainage materials and potential infrastructure development.

Work Group 173 – Steel Water Pipe Installations

In the steel water pipe installations sector, the index saw a moderate increase of 2.6%. This change was driven by a remarkable 8.9% shift in the PPI index for fiberglass, contributing 12.0% to this group. Additionally, there was a 5.5% change in the SEIFSA index for table C4 – all hourly paid employees, which accounted for 40.0% of the index. This combination of factors suggests a positive outlook for steel water pipe installations.

Work Group 120 – Waterproofing

Contrary to the upward trends in other sectors, the waterproofing sector experienced a decrease of 5.2% in its index. The primary contributor to this decline was a significant -7.4% change in the PPI index for bituminous mixtures, representing a substantial 65.0% of this work group’s index. This drop might be indicative of a slowdown in the waterproofing industry.

Work Group 125 – Metal Roofing (Aluminium)

Metal roofing, specifically aluminum products, faced a decrease in its index, dropping by 6.1%. This decline can be largely attributed to a -6.7% change in the SEIFSA index for aluminum products 99.7 EC grade rod, constituting 90.0% of this group. The downturn hints at potential challenges in the aluminum roofing sector.

Construction Input Price Index (CIPI)

The overall annual change in the Construction Input Price Index (CIPI) for total construction in July 2023 was 3.1%, signifying a relatively stable environment. However, some specific indices within CIPI recorded noteworthy month-on-month changes:

Construction Pipes, Tubes, and Fittings

This sector saw a substantial increase of 6.2% in its index, indicating a robust demand for construction materials related to pipes, tubes, and fittings.

Construction Pumps, Compressors, and Refrigerator Machinery

The index for construction pumps, compressors, and refrigerator machinery rose by 4.1%, reflecting potential growth in this sector.

Roof Sheeting

Roof sheeting, on the other hand, faced a significant downturn, with a -5.6% change in its index, possibly indicating a slowdown in roofing projects.

Bituminous Mixtures

Bituminous mixtures recorded a considerable decrease of -7.4% in its index, suggesting potential challenges or reduced demand in this area.

Builders’ Carpentry of Wood

Builders’ carpentry of wood saw a substantial drop of -9.5% in its index, signifying a potential slowdown in wood-related construction activities.

Mining and Construction Plant and Equipment Price Indices

The annual change in the index for plant and equipment was noteworthy at 10.5% in July 2023, showing substantial growth in this sector. Additionally, the index increased by 3.9% month-on-month, indicating ongoing expansion and investment in plant and equipment within the construction and mining industries.

Mechanical and Electrical Engineering Input Price Indices

Mechanical Engineering

The annual change in the index for mechanical engineering stood at 3.4% in July 2023, suggesting steady growth. Although the month-on-month change was relatively small, with a 0.1% increase, it still indicates stability within the mechanical engineering sector.

Electrical Engineering

Conversely, the annual change in the index for electrical engineering was higher at 5.3% in July 2023. However, the month-on-month change was a slight decrease of -1.6%, potentially reflecting some challenges in the short term.

Civil Engineering Material Price Indices

The civil engineering material price indices showed an annual change of 1.4% in July 2023. Notably, the total index increased by 1.4% month-on-month, indicating a relatively stable environment in civil engineering materials.

In conclusion, the South African construction and engineering sectors exhibited diverse trends in July 2023. While some segments, such as ironmongery and drainage, experienced growth, others, like waterproofing and aluminium roofing, faced challenges. The construction input price index hinted at varying dynamics within the industry, with notable increases in certain areas and declines in others. The plant and equipment price indices indicated substantial growth and investment in equipment, while mechanical and electrical engineering sectors demonstrated differing trends. Finally, civil engineering material prices remained relatively stable.

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