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Wednesday Sep 28, 2011

FNB/BER building index steady

Building confidence has remained almost unchanged in the third quarter of 2011, from the preceding quarter, according to First National Bank and the Bureau for Economic Research.

The latest FNB/BER building confidence index edged down to 23 points from 24 points in the preceding quarter, it was revealed on Wednesday.

The index can vary between zero - indicating an extreme lack of confidence - and 100, indicating extreme confidence. It reveals the percentage of respondents that are satisfied with prevailing business conditions in six sectors, namely architects, quantity surveyors, building contractors, building sub-contractors, manufacturers of building materials and retailers of building materials and hardware.

The survey showed that the composite building confidence index remained steady during the quarter under review, as changes in the constituent parts cancelled each other out.

The confidence of quantity surveyors, sub-contractors and building material merchants increased, while that of architects, main contractors and building material manufacturers declined relative to the second quarter of 2011.

"Too much should not be read into the Q3 2011 increase of sub-contractors and merchants, as well as the decline of manufacturers, as a longer term perspective reveals that in these cases confidence mostly reversed to their Q1 2011 levels," said Cees Bruggemans, chief economist at FNB.

Residential building confidence declined to 21 points in the third quarter, from 24 points in the previous quarter, as growth in building activity faltered once more.

However, non-residential building confidence increased to 21 points in the period in focus from 16 points in the previous quarter, boosted primarily by private sector and some government work.

Bruggemans said increased investor uncertainty following renewed sharp falls in global share markets and economic growth downgrades at best pointed to continued weakness in the building industry in the next quarter or so.

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