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Public Sector Building Tender Values August 2024

Sharp Decline in Public Building Tenders: A Post-Election Setback

Public building tender values experienced a significant downturn, plummeting by 78% year-on-year in August to an estimated R964 million, compared to over R4 billion in August 2023. Since May 2024, tender values have fallen by an average of 46% year-on-year, a stark contrast to the 160% surge seen between January and April. The Western Cape was the only province to report a marginal increase, at R80 million, while all other provinces recorded sharp declines.

For the first eight months of 2024, overall tender values dropped by 12% (nominal), totaling R11.2 billion compared to the same period in 2023. Declines were particularly severe in KwaZulu-Natal, Eastern Cape, Free State, Northern Cape, and Mpumalanga. However, some provinces showed resilience. Gauteng nearly doubled its tender values to R1.7 billion, Western Cape saw a 159% increase to R1.1 billion, North West Province rose 82% to R912 million, and Limpopo increased by 16% to R1.4 billion. Provinces with tender values exceeding R1 billion in this period included KwaZulu-Natal, Eastern Cape, Gauteng, Limpopo, and Western Cape.

The overall outlook remains cautious, with a pronounced slowdown in pipeline values and considerable regional disparities. As the 2024/25 financial year budgets are implemented, it remains uncertain whether spending rates will improve or if allocations for social infrastructure will see an increase. The National Budget for 2024 reflected a rise in water-related infrastructure spending but at the expense of cuts to the Transport budget, with housing, health, and education capital expenditures also seeing reductions.

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