SA civil contractor confidence hits highest level since 2016

South Africa's construction sector continued to strengthen on Tuesday, with 50% of contractors satisfied with prevailing business conditions.

The FNB and BER Civil Confidence Index released its latest reading showing gains in the fourth quarter.

This was the second time since 2016 that civil contractor sentiment recorded a high.

Following a two-index-point rise in the third quarter last year, the FNB and BER Civil Confidence Index gained nine index points in quarter four to reach a level of 52.

Supporting the higher sentiment reading was a sharp improvement in activity growth.

In addition to more work, overall profitability was also higher.

The index measuring the growth in overall profitability registered its best level since the end of 2007.

Senior economist at FNB, Siphamandla Mkhwanazi, said it was a stretch to claim that profit margins were as generous as they were in the run-up to the 2010 Fifa World Cup final, when work was much more abundant, but it was clear that civil contractors were enjoying better margins.

He said this had undoubtedly contributed to the better business mood.

Looking ahead, some in the construction industry expected activity to continue on this upward trajectory in the first quarter of the year.