Quarry Southern Africa January 2017 | Page 42

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Reports give hope ahead of 2017

As we head into 2017 , reports from Statistics South Africa and Deloitte show that the future for South Africa ’ s construction and related industries may be looking up .

In October 2016 , the International Monetary Fund ( IMF ) revised its global growth forecast for 2016 and 2017 downwards to 3.1 % and 3.4 %, respectively . Gross domestic product ( GDP ) growth in most emerging markets has dropped dramatically over the past two years , and Africa is no exception .
Deloitte ’ s recently published Africa construction trends report 2016 : Africa ’ s changing infrastructure landscape gives an overview of the state of the construction industry in Africa , comparing data from the past few years to identify trends , and delivering insights on both the regional and continental level . The report includes 286 African construction projects , valued at a total of USD324-billion , which had broken ground by 1 June 2016 and have a minimum value of USD50-million .
At the same time , Statistics South Africa ( Stats SA ) recently released the Annual Financial Statistics ( AFS ) 2015 report , with the Quarterly Employment Survey ( QES ) 2016 results giving us a glimpse of how South Africa is faring .
Africa construction trends report 2016 The Deloitte report shows that sub-Saharan Africa ’ s growth forecast for 2016 is only 1.4 %
— the first time the region has fallen below the global average since 2000 . However , recovery is expected in 2017 , and average regional growth for 2016 – 2017 is predicted at 3.6 %. In North Africa , contracting economic activity in South Sudan and Libya has negatively impacted growth , but Libya ’ s expected return to growth in 2017 pushes the average regional outlook for 2016 – 2017 to 1.6 %. South Africa accounts for almost half ( 41 ) of southern Africa ’ s 85 construction projects , valued at USD93.4-billion , and has the most projects by country in Africa . The country also accounts for the majority ( 48.2 %) of the region ’ s infrastructure and capital project activity , and is home to four of the 10 largest projects across southern Africa . South Africa is also home to the majority of projects in the regional real estate sector , which accounts for 30.6 % of all construction activity .
One of the biggest contributors to the slowdown in growth is the decline in commodity prices , which some estimate will only return to pre-2013 levels by 2020 . Exposure to downswings has been detrimental to African countries ’ macroeconomic landscape , and investment in extractive industries has declined sharply , as has exploration activity . The report calls on African governments to become value-added and services-orientated economies to minimise the effect of commodity price slumps .
INSIGHT
AFS 2015 and QES 2016 Stats SA ’ s AFS 2015 shows that the mining and quarrying sector saw an increase in turnover of 3.0 %, accounting for 6.7 % of total turnover . The sector also saw a 0.2 % increase in capital expenditure on assets and a 4.6 % increase in the carrying value of property , plant and equipment , and intangible assets . According to the QES 2016 results , the mining industry saw an increase of 2 000 employees for the third quarter of 2016 , as well as an increase in gross earnings of ZAR979-million during this period .
Meanwhile , the construction industry saw an increase of 5.3 % in turnover , accounting for 5.1 % of total turnover . The industry ’ s capital expenditure on assets decreased by 10.4 % to R5 092-million ( down from R5 524-million in 2014 ), while the carrying value of property , plant and equipment , and intangible assets increased by 8.2 % from R45 565-million in 2014 to R49 296-million in 2015 . Based on QES 2016 results , the construction and business services industry saw an increase of 6 000 employees in the third quarter , and an increase in gross earnings of ZAR680- million for the period .
The AFS report collects a range of financial statistics for enterprises in the formal sector , with the aim of providing input to estimates of the annual GDP and its components . The QES contains results of the survey of quarterly employment statistics on the number of employees and gross salaries paid in selected industries .
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40 _ QUARRY SA | JANUARY 2017