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Public Sector Building Tender Values September 2024

Sharp Decline in Public Building Tender Values Raises Concerns, Despite Regional Bright Spots

Public building tender values experienced a sharp decline, with a 54% year-on-year drop in September, following an even steeper 78% contraction in August. Tender values for September were estimated at under R2 billion, significantly lower than the R4 billion recorded in the same period in 2023. The Eastern Cape reported the highest tender value at R646 million, showing a 24% increase, closely followed by Gauteng with a similar rise.

Overall, the third quarter of 2024 saw a 62% year-on-year decline, with total tender values falling to R3.7 billion, marking a reduction of over R6 billion compared to 2023. The first nine months of 2024 reflected a 23% decrease in tender values. However, three provinces—Gauteng, North West, and Western Cape—bucked the downward trend, reporting growth in tender values, while KwaZulu-Natal recorded the steepest decline.

While the outlook remains challenging, exacerbated by the post-election slowdown, some provinces offer a glimmer of hope. Capital budgets for buildings and other fixed structures have shown double-digit increases in Limpopo, Northern Cape, North West, and Western Cape. However, six months into the 2024/25 financial year, Limpopo and Northern Cape are underperforming expectations in terms of tenders issued. The Human Settlement Development Grant remained unchanged for 2024/25, with Free State benefiting from a 26% increase, while budget cuts impacted KwaZulu-Natal, Limpopo, Mpumalanga, and Northern Cape.

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