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Gross Fixed Capital Formation 4th Quarter 2024

A stronger performance in the agriculture, finance and trade sector supported a 0.6 percent q-q increase in GDP for Q4 of 2024. Total fixed investment declined by 0.7 percent q-q, after having shown a moderate increase of 0.3 percent in the previous quarter. Although investment by the private sector increased by 1.5 percent, a contraction in investment by government and SOE's of 5.4 percent and 7.4 percent negativley impacted total investment that subsequently slowed to just 14 percent of GDP.

The construction industry underperformed against GDP and fell by 0.4 percent q-q sesonally adjsted annualised rate (SAAR), following a revised 0.8 percent q-q increase in the previous quarter, due to lower levels of investment in the residential and non-residential sectors. Fixed investment in Construction works rose 0.8 percent, from a 2.1 percent q-q increase in Q3.

However the non-seasonally adjusted numbers tell a different story. Although the residential market remained depressed, investment by the non-residential sector showed a 0.5 percent y-y and a 4.7 percent y-y increase in quarters three and four, but construciton works declined by an average of 3.5 percent over the last two quarters of 2024. This means the rate of decline in the construction industry accelerated from -2.7 percent in Q3 to 3.0 percent in Q4. The weak performance in the construction sector contradicts the increase in the labour force during the last two quarters, although this was largely supported by an increase in the informal sector. The civil contractor confidence index, published by FNB/BER has also shown an improvement during the second half of 2024, with confidence levels reaching 50 in Q3 with a modest decline to 48 in Q4. These are some of the best levels we've seen since 2017. Yet, according to the GFCF numbers for construcion, investment declined.

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