Building data highlight fragility of recovery

Building data highlight fragility of recovery - 2010/07/22

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BUILDING statistics released yesterday have underlined the fragility of the economic recovery, and the weakness in business confidence. Buildings completed in the first five months of this year dived 23,6% from a year earlier to R12,16bn, at constant prices, Statistics SA said yesterday. Building plans passed by larger municipalities slumped by 18,6% to R16,26bn, also at constant prices. Of these, nonresidential buildings suffered most. Approved plans for the sector plummeted 42,8% to R3,55bn in the first five months of this year versus last year. “This shows the lack of confidence which business has to invest in the economy — it would rather be cash-flush than invest in fixed assets,” Brait economist Colen Garrow said. “This will not change until there is more certainty on the direction and the extent of the economic recovery.” There was a glimmer of hope in a breakdown of the figures. The seasonally adjusted value of building plans passed by larger municipalities declined by just 0,6% to R10,28bn in the three months ended in May, compared with the previous three months. The fall was mainly due to a 4,8% fall in plans passed for nonresidential buildings, with increases of 0,8% for residential buildings and a rise of 0,5% for additions and alterations in residential buildings. MARIAM ISA

Source: Business Day	Date: 2010/07/22

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