President Ramaphosa's July 2024 Parliament address has generated significant excitement in the construction sector, due to promises of "massive" infrastructure investment. Despite previous promises with minimal impact, there was a moderate improvement in construction investment in 2023, with increased confidence among civil contractors and higher tender values. However, budgetary allocations for 2024/25 show a 7% real cut in infrastructure spending, with further reductions planned for the following years, raising concerns about the feasibility of these promises.

Government's expenditure will be closely monitored, especially at provincial and local levels, where financial mismanagement has led to underspending and poor service delivery. The upcoming Medium-Term Budget Policy may provide more clarity on government's future infrastructure plans, that has dissapointed thus far. Despite rhetoric about increasing infrastructure spending, actual government contributions remain low, with the private sector and state-owned enterprises (SOEs) providing the majority of investment. Privatisation, particularly in energy and water sectors, is seen as a potential solution to overcome funding and operational challenges. However, the establishment of a new State-Owned Entity in the water sector raises questions about the effectiveness of private sector involvement.

Local governance improvement is crucial, as many municipalities are failing and require better leadership, fiscal management, and accountability. Government's contribution to construction investment is minimal, and private sector confidence has been declining, affecting overall investment levels. To truly transform the country into a construction hub, support from the private sector is essential, requiring measures to restore business sentiment and affordability. Higher lending rates are impacting consumer affordability, particularly in the residential market, and budget cuts in human settlements are expected to exacerbate social housing issues.

Some positive indicators include a significant increase in civil projects out to tender and improved confidence among civil contractors and engineers. However, the building sector remains under pressure due to low confidence levels and reduced social infrastructure expenditure. While the future appears promising with a focus on infrastructure spending, a clear and decisive action plan is needed. The specifics of how these plans will be implemented remain uncertain, and the upcoming Medium-Term Budget Policy may provide further insights. Progress will require incremental, decisive steps to ensure sustainable change. Will the dawn of the GNU finally bring about permanent positive change?