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Construction Monitor August 2024

Nedbank's Capital Expenditure Report for the first half of 2024 revealed planned investments amounting to R793 billion. However, this figure is inflated by the inclusion of municipal budgets, making it less comparable to previous periods. In contrast, Industry Insight’s project listings reported a more conservative R354 billion, which represents a 115% increase from the same period in 2023. This figure rose to R533 billion by August 2024. Privatisation discussions have shifted focus towards addressing South Africa’s deteriorating water infrastructure, presenting a R100 billion investment opportunity.  Consumer inflation slowed to 4.6% in July, marking the lowest rate in 39 months, while the rand strengthened, increasing optimism for a potential interest rate cut by September 2024. Retail and vehicle sales showed moderate growth, while the wholesale trade and manufacturing sectors continued to experience challenges. Electricity production improved, with no instances of loadshedding reported between April and August, partly due to contributions from renewable energy sources. Economic indicators, such as ABSA’s PMI, pointed towards a recovery by July, following uncertainties related to post-election outcomes. In August 2024, the Auditor General released the 2022/23 Local Government Financial Review, which indicated a 3% rise in unauthorized, irregular, and wasteful expenditure, totaling R15 billion. Only 34 out of 257 municipalities received clean audits, with the Western Cape achieving the best results, including a 50% reduction in wasteful expenditure. In contrast, Gauteng saw significant increases, with the City of Tshwane facing severe financial inefficiencies.

During August 2024, various provinces reported progress in housing, infrastructure, and investment projects. In the Western Cape, the City of Cape Town announced new housing initiatives, releasing several parcels of land for development. A draft budget proposed over R4 billion for informal settlements and affordable housing. Cape Town also received a clean audit and recorded the largest single-year infrastructure investment of R9.4 billion, alongside new solar energy projects and substantial property investments. In Gauteng, Johannesburg’s new mayor, Dada Morero, sought R2 billion to fund critical water and electricity projects, part of a broader R44 billion plans aimed at addressing infrastructure gaps while in the Eastern Cape, progress was made on the N2 Wild Coast Road project, valued at R2.2 billion. KwaZulu Natal reported a surge in investments, including the R1.1 billion Ogihara Manufacturing investment and additional funding for transport infrastructure.

In summary, August 2024 was marked by significant progress in infrastructure projects, particularly in the Western Cape and KwaZulu Natal. However, challenges remain in housing delivery and service provision across several provinces, with ongoing economic pressures and strained government resources impacting overall performance.

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