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There is hope of a robust recovery in civil construction if the government can follow through on its ambitious plans to invest in large scale civil projects and incentivise the private sector, says construction market intelligence firm Industry Insight.

However, Industry Insight said the non-residential construction segment is expected to come under increased pressure over the next 12 to 18 months because of big cuts to public sector spending and a severe lack of demand for commercial buildings with excess supply.

In addition, there has not been any evidence of any sustainable bounce back in investment in the residential housing market this year and data from this segment has been much worse than expected, Industry Insight said in its latest SA Construction Industry Forecast Report.

The civil construction industry seems to be emerging from the ashes and has finally reached a turning point “from absolute rock bottom levels”, it said.

Caveats

“This statement does however come with several caveats, as the robust tender activity we are seeing is not exactly translating into awarded contracts at the pace we would like, with extremely disappointing data so far this year.”