This Sense-making Update comes as we are nearing the halfway mark of the year. This means that we should by now be developing quite a good picture of what this year holds.

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At this point it is evident that there is an improving trend in both BPP and BC, at least as far as CURRENT VALUES are concerned, which of course includes the effect of inflation. It is similar, although not as pronounced in real (m2 or numbers) terms.

The improving trends are exhibited by both the Residential and the Non Residential sectors (and of course Total Building). However, it is one thing to observe an improving trend in the deviation based on comparison of cumulative actual for 2010 versus 2009, but a substantial amount of ground lost in the first 5 months of 2010 (in fact some R3,8 Billion) will have to be made up in the next 7 months in order to end up at the same level as 2009.

Even so this would of course imply that BPP and BC for 2010 will be below 2009 in real terms. And it must be remembered that BPP and BC represent only about 30% of total Building Activity. The Public Sector Building, Affordable Housing and Unrecorded Additions and Alterations are not accounted for in the BPP and BC numbers.

The Investment by the Public Sector can only be monitored through the Quarterly data on GFCF in Residential, Non Residential and Construction published by the SARB (See Medium-term Dashboard attached).

According to this analysis GFCF for Residential increased by 0,77% for Cumulative Q1 2010 versus 2009 (in Current value). The GFCF for Non Residential increased by 1,11% for Cumulative Q1 2010 versus 2009 (in current terms); and therefore the GFCF for Total Building for Cumulative Q1 2010 versus 2009 increased by 2,93% (in current terms).

It can also be seen that GFCF for Construction Works increased by 18,1% in cumulative Q1 2010 versus 2009.

Dr.Llewellyn B Lewis,