Constrained government revenue and weak private investment will limit the wider expansion ofthe South African construction sector over coming years. Upgrades to freight logistics capacity and thecountry's thermal power capacity will underpin industry growth, with further support stemming from therollout of the national social housing programme, investment in water infrastructure and the build ofmixed-use developments in the economic hub of Gauteng.
Forecast & Industry Developments
We continue to forecast 1% real growth in 2017 for the South African construction industry, afterdowngrading our outlook last quarter. The revision came after data showed the construction sector andeconomy performed poorly in Q117, and given this was before the already poor investor sentimenttowards the market faced further challenges, we maintain it is unlikely the market as a whole showedsignificant improvement in the subsequent quarters.