Construction in South Africa to Witness CAGR of More than 9% up to 2016, Reports Timetric
21 Aug 2012 • by Natalie Aster
The South African construction industry increased in value at a compound annual growth rate (CAGR) of 15.54% during the review period (2007–2011). This was supported by 2010 FIFA World Cup, which acted as a catalyst to the growing South African construction industry. The infrastructure market was the largest beneficiary of the 2010 FIFA World Cup, as most construction activity involved road, public transport and other infrastructure-related developments. Over the forecast period (2012–2016), the industry is expected to register a lower CAGR of 9.61% due to the continuing eurozone crisis which is dampening global business sentiment.
The new report "Construction in South Africa – Key Trends and Opportunities to 2016" by Timetric states that infrastructure construction was the largest market in the South African construction industry during the review period. It constituted 47.7% of the industry’s value in 2011, after growing at a CAGR of 17.64% during the review period. The growth recorded in the review period can be attributed to the investments made by the government in infrastructure improvements to facilitate the 2010 FIFA World Cup. Over the forecast period, the market is expected to record a CAGR of 10.81%.
Construction in South Africa – Key Trends and Opportunities to 2016
Published: July, 2012
Price: US$ 1.950,00
The South African residential construction market is driven by population growth, urbanization, the increasing prosperity of the middle classes, and increasing disposable incomes. Residential construction was the second-largest market, accounting for 37.5% of the construction industry’s value in 2011. After infrastructure construction, the residential construction market is key to the South African construction industry’s growth in the forecast period.
Commercial construction was the third-largest market, accounting for 8.7% of the total construction industry value in 2011. The market recorded a CAGR of 18.62% during the review period, principally driven by the office buildings and retail buildings categories which together constituted 95.3% of the market in 2011. Over the forecast period, the office buildings category is expected to achieve a CAGR of 9.56%.
The industrial construction market accounted for 4.9% of the industry in 2011, having grown at a CAGR of 16.11% during the review period. South Africa is categorized as a newly industrialized country and has a huge potential to grow over the forecast period, which is also needed to tackle high unemployment and poverty in the country. Over the forecast period, Timetric expects the market to record a CAGR of 10.26%.
Institutional construction is the smallest market in the South African construction industry, accounting for 1.2% of the industry’s value in 2011. The market recorded a CAGR of 16.51% during the review period, largely contributed by the largest category, educational buildings, which accounted for 59.6% of the market in 2011. The steady increase in expenditure to improve the education sector helped the category to grow at a CAGR of 17.67% during the review period, and over the forecast period, the education buildings and healthcare buildings categories will be the key growth drivers of the institutional construction market. Timetric expects the market to achieve a CAGR of 8.24% over the forecast period.
More information can be found in the report “Construction in South Africa – Key Trends and Opportunities to 2016” by Timetric.
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