<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
SIMON BROWN. I\u2019m chatting now with Dr Roelof Botha about the Q1 2026 Afrimat Construction Index. Roelof, always appreciate the time.<\/p>\n
Before we get to the index data, a quick thought from you. Yesterday\u2019s passing of Alan Greenspan \u2013 he was Fed chair from 1987 to 2006, through the crash of \u201987, the \u201997 Asian financial crisis, dotcom\u2019s \u2018irrational exuberance\u2019 and 9\/11. It was a long term. Maybe a bit of a mixed legacy. Your thoughts on Alan Greenspan as the Fed chair?<\/p>\n
DR ROELOF BOTHA: I think he did a pretty good job, better than the people who followed him \u2013 for some concern.<\/p>\n
SIMON BROWN: Yes. I take your point on that, absolutely. Did he lead us to the 2008 crisis \u2013 we\u2019ll never know. But it was almost 20 years, and a lot going through.<\/p>\n
Let\u2019s get to that Afrimat Construction Index. This is Q1 of 2026. What stands out to me \u2013 you and I have touched on this before \u2013 we\u2019ve seen some good employment coming through the sector, and that is hugely important because, as we\u2019ve said before, construction really can help with unemployment.<\/p>\n
Read:
Afrimat Construction Index Q3 data \u2018looking good\u2019
Why the Reserve Bank\u2019s MPC needs to be reworked
\u2018Our real interest rate is 8.3% \u2013 the highest in the world\u2019<\/p>\n
DR ROELOF BOTHA: Yes. I always reminisce about what happened en route to the Soccer World Cup in 2010. I remember that period quite vividly.<\/p>\n
The South African economy grew at 5% in real terms per annum for four years in a row, and we created literally millions, especially in construction. As part and parcel of that success story we also had the RDP Housing Project and so on.<\/p>\n
And then unfortunately we had the crash, and things went quite well until 2015 with Gill Marcus at the helm of the Monetary Policy Committee.<\/p>\n
The average real prime rate \u2013 which is the prime rate minus CPTI [sic] \u2013 during her five-year term of office was 3.4%. That doubled shortly after her retirement.<\/p>\n
That was the first disaster. The second one was State Capture, which lasted for a decade. The third one was Covid.<\/p>\n
So from that level you\u2019d expect an industry like construction, which is labour intensive to a large extent, to have recovered by now.<\/p>\n
But unfortunately, the restrictive monetary policy is still, as far as I\u2019m concerned, the biggest single drawback.<\/p>\n
Read:
South Africa stopped growing in 2009
Late government payments threaten survival of SA\u2019s construction sector
\u2018Construction industry\u2019s future not sole responsibility of government\u2019
Construction sector employment equity battle brews<\/p>\n
SIMON BROWN: Absolutely. I take your point on that. The employment is a good number. We\u2019ve got a long way to go on that point.<\/p>\n
We\u2019re also seeing the total construction tender activity for February and March \u2013 two months of double-digit increases. It\u2019s early days and I wouldn\u2019t say at this point that that this is conclusive that we\u2019re on a rebound, but it is trending in the right direction \u2013 albeit, to your point, we\u2019ve a long way to go.<\/p>\n
DR ROELOF BOTHA: Yes, I think, to use the expression. the construction sector is certainly \u2018geared for growth\u2019. If you look at Afrimat\u2019s acquisition of Lafarge, what they\u2019ve done there, and what I find interesting, just a coincidence, is the real value of building materials sales \u2013 1.4% year on year.<\/p>\n
That\u2019s exactly off the nose of the GDP growth rate, 1.4% year on year. So I think that will warm the heart of Andries van Heerden at Afrimat.<\/p>\n
And what I also find encouraging from their activities is that they\u2019ve been operating in most of the provinces.<\/p>\n
They\u2019ve been working in the eastern Free State, and there have been large projects in KZN, also in Gauteng, despite all the problems we\u2019ve got here with governance.<\/p>\n
Read\/Listen:
Expert insights on SA\u2019s revised M&A regulations
Lafarge integration lifts Afrimat performance<\/p>\n
But, as you\u2019ve indicated, the tender activity seems to be picking up as well. I\u2019m pinning my hopes \u2013 and that wasn\u2019t even mentioned in in the media statement on this \u2013 the spend on, what is 14\u00a0500km of new grid transmission lines. Now, you need a lot of cement to get those batons up and running.<\/p>\n
But they\u2019re taking their time again. I see the private sector, the IPPs [the independent power producers] are getting really frustrated about the time it\u2019s taking to get everything through. It seems as if Eskom still wants to cling to monopoly as far as the grid access unit is concerned \u2013 and that worries me tremendously.<\/p>\n
Read:
Eskom\u2019s new unbundling plan a \u2018step backwards\u2019 \u2013 BLSA
Eskom unbundling faces fresh hurdles as energy reform drags on
Curtailment, conflicts of interest and cash flow: Eskom\u2019s tightening grip on IPPS<\/p>\n
SIMON BROWN: I think it was in the president\u2019s State of the Nation Address that he pointedly said, \u2018We are going to separate Eskom\u2019. I agree with you. I\u2019m not sure Eskom wants to be separated, but I think it is going to happen.<\/p>\n
We\u2019ve also seen some private-sector capital formation looking better, which is always a good sign as well.<\/p>\n
We\u2019ll leave it there. Dr Roelof Botha, appreciate the early morning time.<\/p>\n
#construction #sector #shows #promise<\/p>\n","protected":false},"excerpt":{"rendered":"
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