South Africa’s civil construction sector is grappling with uncertainty over future projects despite the current improvement in activity and profitability.
This is according to the latest FNB/BER Civil Confidence Index for the second quarter of 2025 released on Monday.
The index dropped to 41 points from 45 in the previous quarter, marking the third consecutive quarterly decline. The current reading indicates that nearly 60% of respondents are dissatisfied with prevailing business conditions.
“According to Statistics South Africa, the real value of spending on construction works decreased by an annual rate of 2.4% in 1Q2025. These results point to an improvement in 2Q2025,” FNB senior economist Siphamandla Mkhwanazi said.
Despite better activity this quarter, contractors expressed concerns about order books for the coming months.
The survey highlighted an increase in the rating of insufficient demand as a key business constraint. Respondents were also more pessimistic about future activity levels than the actual outcomes recorded this quarter.
“The comments from respondents highlight some of their concerns regarding activity going forward, such as the lack of published tenders, persistent delays in adjudication and, concerningly, a lack of large infrastructure projects in particular,” Mkhwanazi said.
The report suggests that while there has been a short-term improvement in profitability and employment, a sense of stagnation is weighing heavily on the sector.
“There is a broad sense from official data, the survey data, and anecdotally, that infrastructure projects, particularly large state-led projects, are not as forthcoming as previously hoped,” Mkhwanazi said.
“Indeed, despite many dialogues, conferences and speeches on infrastructure and its importance to growth and development, we have yet to see this reflected in the form of sustainable construction activity,” he said.
The index, which can vary between zero (total dissatisfaction) and 100 (complete satisfaction), uses a neutral benchmark level of 50. The decline to 41 this quarter reflects an overall cautious mood among civil contractors.
Fieldwork for the second-quarter survey was conducted between May 7 and 26.
