Dublin, Sept. 10, 2024 (GLOBE NEWSWIRE) -- The "South Africa Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2028 (Q2 2024)" report has been added to ResearchAndMarkets.com's offering.
The analyst expects the construction industry in South Africa to shrink by 2.7% in real terms in 2024, owing to headwinds such as elevated cost of production, rising energy prices, rising debt level, insufficient power supply, and railway and port crisis.
In November 2023, South Africa's rail and port utility company Transnet witnessed congestion and blockages with rising containers in the Port of Durban (commonly called Durban Harbour - the largest and busiest shipping terminal in sub-Saharan Africa) and derailment of the rail network due to poor policy, negligence in maintenance, operational challenges, equipment failures, corruption, and incompetence of authority.
This ongoing crisis is likely to impact the country's imports and exports. Additionally, a fall in foreign direct investment (FDI) will also weigh on the industry's output in 2024. According to the South African Reserve Bank, the total FDI inflows fell by 36.1% year-on-year (YoY) in 2023, following an overall annual fall of 75% in 2022. The construction industry witnessed a weak start in 2024, with the industry's value add falling by 8.7% YoY in Q1 2024, following Y-o-Y falls of 4.5% in Q4 and 3.2% in Q3 2023, according to Statistics South Africa (Stats SA).
The South African construction industry is however expected to rebound in 2025 and record an average annual growth rate of 3.5% during 2025-28, supported by investments in renewable energy, electricity, transportation, and industrial projects. The government aims to produce 26% of the total electricity from renewable energy sources by 2030. To achieve this goal, the state-owned electricity public utility company Eskom plans to invest ZAR106 billion ($5.7 billion) on the construction of wind farms and solar plants.
The government's focus on increasing the number of Special Economic Zones (SEZ) across the country will also support the industry's growth over the coming years. The government plans to boost infrastructure development in the country by increasing public-private collaborations and partnerships with regional governments. In March 2024, the Deputy President of South Africa mentioned that ZAR230 billion ($12.4 billion) worth of infrastructure projects are in the construction phase as of March 2024.
Growth during the forecast period will also be supported by the updated Integrated Resource Plan (IRP) to 2030 and 2050. This was revised in January 2024 and outlines the necessity to build substantial new capacity with a mix of nuclear power, renewables, clean coal, and gas to ensure reliable electricity supply and achieve a net zero electricity sector by 2050. This plan will be executed in two phases, one from 2023 to 2030 and the second from 2031 to 2050. It includes the addition of 29.3GW of new energy generation capacity in South Africa by 2030, including more than 7GW of new gas projects, 4.5GW of wind, and 3.6GW of solar PV.
Scope
- Historical (2019-2023) and forecast (2024-2028) valuations of the construction industry in South Africa, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
- Identify and evaluate market opportunities using the analyst's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using the analyst's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.
Key Topics Covered:
1 Executive Summary
2 Construction Industry: At-a-Glance
3 Context
3.1 Economic Performance
3.2 Political Environment and Policy
3.3 Demographics
3.4 Risk Profile
4 Construction Outlook
4.1 All Construction
- Outlook
- Latest news and developments
- Construction Projects Momentum Index
4.2 Commercial Construction
- Outlook
- Project analytics
- Latest news and developments
4.3 Industrial Construction
- Outlook
- Project analytics
- Latest news and developments
4.4 Infrastructure Construction
- Outlook
- Project analytics
- Latest news and developments
4.5 Energy and Utilities Construction
- Outlook
- Project analytics
- Latest news and developments
4.6 Institutional Construction
- Outlook
- Project analytics
- Latest news and developments
4.7 Residential Construction
- Outlook
- Project analytics
- Latest news and developments
5 Key Industry Participants
5.1 Contractors
5.2 Consultants
6 Construction Market Data
7 Appendix
For more information about this report visit https://www.researchandmarkets.com/r/2v1yfy
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