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South Africa Infrastructure Industry Update Quarter 2 2012
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BMI View: World Cup excesses, heavy bureaucracy and continuing political wrangles have weighed heavy
on South Africa's previous glories. Last quarter we highlighted factors indicating a tentative change and
that view is now playing out. 2012 real growth data came in as expected on 2.5%, lending credence to our
longer term outlook. However, much is left to be done to lift South Africa's struggling and debt-ridden
construction sector out of its quagmire. Despite a slow return to positive territory, with a real construction
industry growth of 2.9% forecast for 2013, the risks are still plentiful: policy uncertainty, cumbersome
bureaucracy, intense credit rating pressure and violent clashes in relation to several strikes at mines across
the country.
Though South Africa's construction industry appears to be bottoming out and is now seeing a slow return to
growth, it is important to note that South Africa is still lagging behind many of its neighbours; who are all
registering a strong average growth of 6% for the same time period.
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