South Africa’s building industry struggled in Q1’2025

South Africa's building industry continues to face challenges in the first quarter of 2025, as the FNB BER Building Confidence Index showed a marginal improvement to 41 from 40 in the previous quarter. Despite this slight uptick in sentiment, the majority of respondents in the sector remain dissatisfied with current business conditions. Siphamandla Mkhwanazi, Senior Economist at FNB, highlighted the ongoing issues in the industry, including declining profitability, weak residential investment, and municipal inefficiencies. The interview with CNBC Africa shed light on the key structural and policy interventions needed to shift the industry's sentiment and potential trends in the sector. Mkhwanazi discussed the expectations for future activity, challenges faced by contractors, and the comparison of current sentiment to historical trends in the building sector. The interview also touched on the performance of the residential and non-residential sectors, as well as the confidence shown by hardware retailers. Additionally, Mkhwanazi shared insights on the lag between positive sentiment and actual investment growth, risks that could impact the industry, and emerging trends in both private sector and government infrastructure spending that could influence the building sector. Despite some optimism among main building contractors for future work, uncertainties and constraints within the industry continue to pose risks to the sector's growth. The conversation with Mkhwanazi delved into potential solutions to boost the building industry and enhance its performance in the coming quarters.