the industry dashboard ytd 2011 sv dec 2011 (pp presentation)
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1 © BMI-BRSCU© BMI-BRSCU
TowardsMaking sense of the Building-, Construction- and Property-Industry:
THE INDUSTRY DASHBOARD: YTD 2011Dr. Llewellyn B. Lewis
December 2011
THE STRATEGIC FORUM
A place of assembly for strategic conversations
THE STRATEGIC FORUMwww.strategicforum.co.za
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Studium Ad Prosperandum
Voluntas in Conveniendum
BUILDING RESEARCHSTRATEGY CONSULTINGUNIT cc
Reg. No. 2002/105109/23
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Studium Ad Prosperandum
Voluntas in Conveniendum
BUILDING RESEARCHSTRATEGY CONSULTINGUNIT cc
•BMI
•BMI
•BMI
•BMI
Studium Ad Prosperandum
Voluntas in Conveniendum
BUILDING RESEARCHSTRATEGY CONSULTINGUNIT cc
Reg. No. 2002/105109/23
•BMI
Studium Ad Prosperandum
Voluntas in Conveniendum
BUILDING RESEARCHSTRATEGY CONSULTINGUNIT cc
•BMI
•BMI
•BMI
•BMI
•BMI
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•
2
THE INDUSTRY DASHBOARD: DECEMBER 2011: BPP AND BC (OCT), CEMENT AND LUMBER SALES (NOV).
Domestic Cement Sales (Tonnes) ended 2010 at -7,75% compared to 2009
Cumulative Y/Y January 2011 for Domestic Cement Sales recorded a decrease of -5,04% compared to 2010, followed by Cumulative Y/Y declines of -3,34% in February, -2,85% in March, -1,91% in April, -2,11% in May, +0,04% in June and +0,07% in July and + 0,69% in August, +2,08% in September, +2,95% in October and + 3,58% in November - thus a gradually improving trend.
The MAT Forecast for Domestic Cement Sales shows marginal growth of + 3,34% for 2011 vs 2010.
Local Building Lumber Sales (m3) ended 2010 at +7,20% compared to 2009.
Cumulative Y/Y January 2011 recorded a massive increase of 34,58% compared to 2010, followed by Cumulative Y/Y growths of 19,62% in February, 17,38% in March, 12,86% in April, 12,56% in May, 15,57% in June, 15,78% in July, 14,61% in August, +17,48% in September, +15,67% in October and + 14,10% in November.
It does appear as if Lumber Sales is continuing to "buck the trend" which may be the "green shoots" the building industry is looking for.
The MAT Forecast for Local Building Lumber Sales (in m3) shows strong growth of + 13,22% for 2011 vs 2010.
. Total Building Plans Passed (m2) ended 2010 at -11,65% compared to 2009.
Cumulative Y/Y building plans passed (BPP) by larger municipalities (in m2) for YTD Oct 2011 decreased by -2,25% compared with Oct 2010.
• A decrease was reported for Additions and Alterations BPP (- 16,07%), whilst
• BPP for Residential Buildings increased by + 2,60%.
• The increase reported for non residential buildings BPP was + 11,19%. Longer term trends in the non-residential sector still reflect falling demand levels.
The MAT Forecast for Residential BPP (in m2) shows marginal growth of + 2,23%, Non Residential BPP shows growth of + 9,48%, Additions and Alterations BPP shows decline of – 13,69% and Total BPP shows decline of – 1,92% for 2011 vs 2010.
THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2009 & 2011
3
Total Buildings Completed (m2) ended 2010 at -27,87% compared to 2009.
Cumulative Y/Y buildings reported as completed (BC) to larger municipalities (in m2) for YTD Oct 2011 decreased by – 7,92% compared with Oct 2010.
• The largest percentage decrease in the value of buildings reported as completed (BC) was reported for Non residential BC (- 22,41%), whilst
• Residential buildings recorded a decline (- 1,85%) and
• Additions and Alterations decreased (- 5,12%).
After these first 10 months results it is still our view that the decline in Residential Investment should decrease month on month from now on and in spite of the expected decline in Non Residential activity (about half that of Residential Building) will contribute to the positive growth in Total Investment in Building from the third quarter of 2011.
The MAT Forecast for Residential BC shows marginal decline of – 1,51%, Non Residential BC shows DECLINE of – 19,56%, Additions and Alterations BC shows a DECLINE of -4,34% and Total BC shows DECLINE of – 6,62% for 2011 vs 2010.
From the foregoing comparisons it can be seen that ALL the indicators indicate a turning point and MAT Forecasts indicating gradual growth (less negative).
It still remains to be seen whether the gradual improvement in BPP and BC from the levels achieved in 2010 will be encouraged by the increasing willingness of the Banks to relax their stringent lending criteria so that Mortgage Advances can flow into the industry. At this stage it is mainly first time homebuyers in the middle income sector that are benefiting.
THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2009 & 2011
4
THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2009 & 2011
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Pe
rce
nta
ge
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Total Res BC Cum YTD % Change (m2) -13.68% -9.13% 3.09% -0.18% -7.48% -3.69% -5.13% -6.44% -3.23% -2.92% -2.62% -2.41%
Total Non Res BC Cum YTD % Change (m2) -27.22% -3.67% -10.82% -9.64% -13.66% -8.22% -17.75% -19.86% -18.45% -16.06% -14.73% -13.80%
Total BC Cum YTD % Change (m2) -17.93% -7.58% -1.42% -3.25% -9.44% -5.12% -9.29% -10.79% -8.11% -7.24% -6.54% -6.06%
Domestic Cement Sales (Tonnes) -5.04% -3.34% -2.85% -1.91% -2.11% 0.04% -0.02% 0.61% 2.08% 2.95% 3.58% 3.34%
Local Building Lumber Sales (m3) 34.58% 19.62% 17.38% 12.86% 12.56% 15.57% 15.78% 14.61% 17.48% 15.67% 13.93% 13.06%
Cumulative YTD Buildings Completed (BC) % Change by Sector Total: January - Sept 2011(Source: StatsSA; BMI-BRSCU Workings)
MAT FORECAST
5 © BMI-BRSCU© BMI-BRSCU
GFCFR521,6 BILLION(22% OF GDP)
BUILDING INV.R108,5* BILLION(20,8% OF GFCF)
CONSTR. INV.R174,9 BILLION(33,5% OF GDFI)
GDPR2663 BILLION
GOVERNMENT BUDGETR798,9 BILLION(30% OF GDP)
TRANSFER DUTYR8- R9 BILLION PA
FTHB SUBSIDIES(1,9% OF BUDGET = R13,8 BILLION)
(500 000 HOUSING UNITS)INVESTMENT IN AFFORDABLE HOUSING
(R1,4 TRILLION 2010-2020)
RESIDENTIAL AND NON RES BPP AND
BUILDINGS COMPLETED (BC)
PRIMARY AND SECONDARY PROPERTY MARKET
R267 BILLION PA MORTGAGE ADVANCES PA
R1000 BIO MORTGAGES O/S
LISTED PROPERTY SECTOR MARKET CAPITALISATION
> R100 BILLION
ANNUAL HOUSINGNEED
(POP. GROWTH ONLY)250 000
INTEGRATED HOUSING
EMPLOYMENTIN BUILDING & CONSTRUCTION
> 1 000 000 PEOPLE
* When the UNRECORDED Home Improvement and Affordable Housing is taken into account Building Investment = 30,5% of GFCF
PROPERTY OWNERSHIPENGINE FOR GROWTH
AND WEALTH CREATIONR4,8 TRILLION RES PROPERTY
R1,7 TRILLION NON RES PROPERTY(Land included)
URBAN HOUSINGBACKLOG > 1,5 MILLION
UNITS IN 2010
GOVERNMENT INFRASTRUCTURE SPEND (R846 BILLION 2010-2020)
THE ROLE OF BUILDING, CONSTRUCTION AND PROPERTY IN THE ECONOMY: 2010www.strategicforum.co.za
6 © BMI-BRSCU© BMI-BRSCU
GFCFR521,6 BILLION(22% OF GDP)
BUILDING INV.R108,5* BILLION(20,8% OF GFCF)
CONSTR. INV.R174,9 BILLION(33,5% OF GDFI)
GDPR2663 BILLION
GOVERNMENT BUDGETR798,9 BILLION(30% OF GDP)
TRANSFER DUTYR8- R9 BILLION PA
FTHB SUBSIDIES(1,9% OF BUDGET = R13,8 BILLION)
(500 000 HOUSING UNITS)INVESTMENT IN AFFORDABLE HOUSING
(R1,4 TRILLION 2010-2020)
RESIDENTIAL AND NON RES BPP AND
BUILDINGS COMPLETED (BC)
PRIMARY AND SECONDARY PROPERTY MARKET
R267 BILLION PA MORTGAGE ADVANCES PA
R1000 BIO MORTGAGES O/S
LISTED PROPERTY SECTOR MARKET CAPITALISATION
> R100 BILLION
ANNUAL HOUSINGNEED
(POP. GROWTH ONLY)250 000
INTEGRATED HOUSING
EMPLOYMENTIN BUILDING & CONSTRUCTION
> 1 000 000 PEOPLE
* When the UNRECORDED Home Improvement and Affordable Housing is taken into account Building Investment = 30,5% of GFCF
PROPERTY OWNERSHIPENGINE FOR GROWTH
AND WEALTH CREATIONR3,8 TRILLION RES PROPERTY
R1,3 TRILLION NON RES PROPERTY
URBAN HOUSINGBACKLOG > 1,5 MILLION
UNITS IN 2010
GOVERNMENT INFRASTRUCTURE SPEND (R846 BILLION 2010-2020)
THE ROLE OF BUILDING, CONSTRUCTION AND PROPERTY IN THE ECONOMY: 2010www.strategicforum.co.za
It is estimated that for every R1 spent on infrastructure, R1.40 is added to a country’s gross domestic product. PPP’s are the ideal vehicle for funding the gaps in infrastructure in Africa. (Deloittes research, May 2011)
“Unless the Housing Market recovers, the Economy will not recover.” (Warren Buffet, CNN, 4 October 2011)
The UK Government plan to promote building. “It clearly has recognised the need to boost house building, both to address the housing crisis and to create jobs.” (Business Day, 22 November 2011)
7 © BMI-BRSCU
Total Mortgage Loans and Readvances by application: 1979-2010 (Current Values) (Source: SARB, BMI-BRSCU Workings)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
R M
illi
on
s (
Cu
rre
nt
Va
lue)
-80%-70%-60%-50%-40%-30%-20%-10%0%10%20%30%40%50%60%70%80%90%100%110%120%130%
Gol
d bo
om
SA
SO
L II
SA
SO
L III
Aus
terit
y pa
ckag
e
Rub
icon
spe
ech
Deb
t sta
ndst
ill
Eco
nom
ic r
ecov
ery
Man
dela
's r
elea
se
Dem
ocra
tic E
lect
ion
Tra
nsiti
on to
Dem
ocra
cy
Cur
renc
y co
llaps
e
Wor
ld T
rade
Cen
tre
BN
G H
ousi
ng P
rogr
amm
e
Sub
Prim
e C
risis
(N
CA
)
Defining Events
Y/Y
Per
cen
atag
e C
han
ge
R233 Billion taken out of the system
in two years!
© BMI-BRSCU
The deleveraging by the Banks and the loss of consumer spending power could only mean lost growth: mortgage repossessions, business failures, and personal bankruptcies . . .
TOTAL MORTGAGE LOANS & RE-ADVANCES: 1979-2010www.strategicforum.co.za
8 © BMI-BRSCU© BMI-BRSCU
NEW MORTGAGE LOANS & RE-ADVANCES: TOTALwww.strategicforum.co.za
Y/Y Cum Actual Total gross new Mortgage Loans and Readvances:Cum YTD June 2011 vs 2010 and 2007 by month
(Source: SARB, BMI-BRSCU Workings)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
R M
illi
on
s (
Cu
rre
nt
Va
lues
)
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
% C
han
ge
Y/Y
Cu
m A
ctu
al 2
011
vs 2
010
Y/Y Cum Actual 2007 30,111 71,925 116,91 153,36 199,88 233,82 270,62 307,38 339,29 376,89 413,16 441,41
Y/Y Cum Actual 2011 15,036 36,268 59,631 78,368 97,547 119,63 142,33 164,40 189,39 214,33 239,16 260,26
Y/Y CUM Actual 2010 14,454 35,182 60,337 81,776 104,52 126,80 149,49 171,56 196,55 221,49 246,32 267,42
% Change Y/Y Cum Actual 2011 vs 2010 4.03% 3.09% -1.17% -4.17% -6.67% -5.65% -4.79% -4.17% -3.64% -3.23% -2.91% -2.68%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MAT FORECAST
9 © BMI-BRSCU© BMI-BRSCU
BUILDING & CONSTRUCTION INVESTMENT
R334 221 MILLION BUILDING INVESTMENT
R159 277 MILLIONCONSTRUCTION INVESTMENT
R174 944 MILL
CONTRACTOR (50,8%)
R67 914 MIOCONTRACTOR (50,8%)
R67 914 MIO
SUBCONTRACTOR (49,2%)
R65 775 MIOSUBCONTRACTOR (49,2%)
R65 775 MIO
LABOUR (40%)
R133 688 MIO
LABOUR (40%)
R133 688 MIO
DIRECT TO USER (40%)
R80 213 MILLIONDIRECT TO USER (40%)
R80 213 MILLIONMATERIAL (60%)
R200 533 MIOMATERIAL (60%)
R200 533 MIO
INDIRECT VIA DISTRIBUTION (60%)
R120 320 MILLION
INDIRECT VIA DISTRIBUTION (60%)
R120 320 MILLION
LARGE IND BUILDERS MERCHANT (10%)
R20 053 MILLION
LARGE CHAIN BLDRS MERCHANT(25%)
R50 133 MILLION
LARGE CHAIN BLDRS MERCHANT(25%)
R50 133 MILLION
HYPERMARKET/SUPERMARKET(5%)
R10 027 MILLION
HYPERMARKET/SUPERMARKET(5%)
R10 027 MILLION
SPECIALIST SHOP(5%)
R10 027 MILLION
SPECIALIST SHOP(5%)
R10 027 MILLION
LOCAL HARDWARE STORE(15%)
R30 080 MILLION
LOCAL HARDWARE STORE(15%)
R30 080 MILLION
RESIDENTIAL INVESTMENT
R12 775 MILLION
NON RESIDENTIAL INVESTMENT
R64 488 MILLION
UNRECORDEDADDITIONS AND ALT’S INVEST**
R35 106 MILLION
* 2010 Prices** Residential and Non Residential
RESIDENTIAL INVESTMENT
R59 682 MILLION
CURRENT REALITY OF BUILDING & CONSTRUCTION: 2010*
CURRENT REALITY: BUILDING & CONSTR: 2010
10
-20%
-10%
0%
10%
20%
30%
40%
50%
De
moc
ratic
Ele
ctio
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Tra
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to D
emoc
racy
Cu
rren
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olla
pse
Wor
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rade
Cen
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BN
G H
ousi
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rog
ram
me
Sub
Prim
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risi
s (N
CA
)
Soc
cer
Wo
rld C
up
0
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4 000
6 000
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/'01
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/'02
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/'03
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/'04
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/'01
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/'02
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/'03
2011
/'04
CU
M Q
/Q (
PR
EV
IOU
S Y
EA
R)
% C
HA
NG
E
Defining Events
R M
ILL
ION
S (
CU
RR
EN
T V
AL
UE
S)
GFCF RESIDENTIAL BUILDING: Q1 1993-Q3 2011: CURRENT VALUESCUMULATIVE YTD Q ON Q (PREVIOUS YEAR) % CHANGE
(Source: SARB; BMI-BRSCU Workings)
CUM YTD Q3 2011 VS 2010 = - 3,46%
CUM Q4 2010 VS 2009 = R40 811 MIO VS R45 321 MIO = - 9,95%ON TOP OF DECLINE OF - 4,99% IN 2009 VS 2008
© BMI-BRSCU© BMI-BRSCU
GFCF RESIDENTIAL BUILDING: Q1 1993-Q3 2011www.strategicforum.co.za
11 © BMI-BRSCU© BMI-BRSCU
GFCF RESIDENTIAL BUILDING: Q1 1993-Q3 2011www.strategicforum.co.za
CumGFCF Q1
CumGFCF Q2
CumGFCF Q3
CumGFCF Q4
CUM Q/Q GFCF RESIDENTIAL 2010 10 283 20 685 30 912 40 811
CUM GFCF RESIDENTIAL 2011 9 388 19 425 29 842 39 741
CUM Q/Q % CHANGE 2011 VS 2010 -8.70% -6.09% -3.46% -2.62%
-10.00%
-9.00%
-8.00%
-7.00%
-6.00%
-5.00%
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
Cu
m Q
/Q P
erc
en
tag
e C
ha
ng
e
R M
illi
on
s
CUM Q/Q GFCF RESIDENTIAL 2011 VS 2010 (*Q3)(Source: SARB, BMI-BRSCU Workings)
MAT FORECAST
12
19
93
/01
19
93
/03
19
94
/01
19
94
/03
19
95
/01
19
95
/03
19
96
/01
19
96
/03
19
97
/01
19
97
/03
19
98
/01
19
98
/03
19
99
/01
19
99
/03
20
00
/01
20
00
/03
20
01
/01
20
01
/03
20
02
/01
20
02
/03
20
03
/01
20
03
/03
20
04
/01
20
04
/03
20
05
/01
20
05
/03
20
06
/01
20
06
/03
20
07
/01
20
07
/03
20
08
/01
20
08
/03
20
09
/01
20
09
/03
20
10
/'01
20
10
/'03
1993
/01
1993
/03
1994
/01
1994
/03
1995
/01
1995
/03
1996
/01
1996
/03
1997
/01
1997
/03
1998
/01
1998
/03
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/01
1999
/03
2000
/01
2000
/03
2001
/01
2001
/03
2002
/01
2002
/03
2003
/01
2003
/03
2004
/01
2004
/03
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/01
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/03
2006
/01
2006
/03
2007
/01
2007
/03
2008
/01
2008
/03
2009
/01
2009
/03
2010
/'01
2010
/'03
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q3 2010: CURRENT VALUESCUMULATIVE YTD Q TO Q (PREVIOUS YEAR) PERCENTAGE CHANGE
(Source: SARB; BMI-BRSCU Workings)
R M
ILL
ION
S (
CU
RR
EN
T V
AL
UE
S)
Defining Events
CU
M Y
TD
Q/Q
% C
HA
NG
E
YTD Q3 2010 VS Q3 2009 = + 6,3%
2009 VS 2008 = R60 880 BIO VS R57 160 Bio = + 6,51%ON TOP OF GROWTH OF + 31,93% IN 2008 VS 2007
© BMI-BRSCU© BMI-BRSCU
GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q3 2011www.strategicforum.co.za
13 © BMI-BRSCU© BMI-BRSCU
GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q3 2011www.strategicforum.co.za
2011/'01 2011/'02 2011/'03 2011/'04
CUM Q/Q GFCF NON RES BUILDING 2010 14 935 29 646 44 028 58 747
CUM GFCF NON RES BUILDING 2011 15 151 30 416 45 509 60 228
CUM Q/Q % CHANGE 2011 VS 2010 1.45% 2.60% 3.36% 2.52%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
Cu
m Q
/Q P
erc
en
tag
e C
ha
ng
e
R M
illio
ns
CUM Q/Q GFCF NON RESIDENTIAL BUILDING 2011 VS 2010 (*Q3)(Source: SARB, BMI-BRSCU Workings)
MAT FORECAST
14
De
moc
ratic
Ele
ctio
n
Tra
nsiti
on
to D
emoc
racy
Cu
rren
cy C
olla
pse
Wor
ld T
rade
Cen
tre
BN
G H
ousi
ng P
rog
ram
me
Sub
Prim
e C
risi
s (N
CA
)
Soc
cer
Wo
rld C
up
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0
5 000
10 000
15 000
20 000
25 000
30 000
1993
/01
1993
/02
1993
/03
1993
/04
1994
/01
1994
/02
1994
/03
1994
/04
1995
/01
1995
/02
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1995
/04
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/01
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/04
2010
/'01
2010
/'02
2010
/'03
2010
/'04
2011
/'01
2011
/'02
2011
/'03
2011
/'04
Defining events
Cu
m Y
TD
Q/Q
Pe
rce
nta
ge
Ch
an
ge
R M
illi
on
s (
Cu
rre
nt
Va
lue
)
Axis Title
GFCF Total Building by Quarter: Q1 1993 - Q3 2011: Current ValuesCumulative YTD Q/Q (Previous Year) % Change
(Source: SARB; BMI-BRSCU Workings)
CUM YTD Q3 2011 VS 2010 = + 1,14%
2010 VS 2009 = R105 290 MIO VS R106 201 MIO = - 0,85%ON TOP OF GROWTH OF + 1,28% IN 2009 VS 2008
© BMI-BRSCU© BMI-BRSCU
GFCF TOTAL BUILDING: Q1 1993-Q3 2011www.strategicforum.co.za
15 © BMI-BRSCU© BMI-BRSCU
GFCF TOTAL BUILDING: Q1 1993-Q3 2011www.strategicforum.co.za
CumGFCF Q1
CumGFCF Q2
CumGFCF Q3
CumGFCF Q4
CUM Q/Q GFCF TOTAL BUILDING 2010 25 218 50 331 74 940 99 558
CUM GFCF TOTAL BUILDING 2011 24 539 49 841 75 351 99 969
CUM Q/Q % CHANGE 2011 VS 2010 -2.69% -0.97% 0.55% 0.41%
-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
0
20 000
40 000
60 000
80 000
100 000
120 000
Cu
m Q
/Q P
erc
en
tag
e C
ha
ng
e
R M
illio
ns
CUM Q/Q GFCF TOTAL BUILDING 2011 VS 2010 (*Q3)(Source: SARB, BMI-BRSCU Workings)
MAT FORECAST
16 © BMI-BRSCU© BMI-BRSCU
TREND IN TOTAL ACTIVITY: BPP AND BC: 1993-2011 (OCT)www.strategicforum.co.za
-50%-45%-40%-35%-30%-25%-20%-15%-10%
-5%0%5%
10%15%20%25%30%35%40%45%50%55%60%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Cum Y/Y % Ch: BPP and BC: Total Building (Incl A&A): 1993-2011: R*1000 (Current Values) (Oct) (Source: StatsSA; BMI-BRSCU: BC Total RSA by Month and Type of Building1993-2008: % CUM BC BY SEGM & MNTH: Chart 15(2))
% CUM BC BY SEGM& MNTH % CUM BPP BY SEGM& MNTH
12 per. Mov. Avg. (% CUM BC BY SEGM& MNTH) 12 per. Mov. Avg. (% CUM BPP BY SEGM& MNTH)
17
-50%-45%-40%-35%-30%-25%-20%-15%-10%
-5%0%5%
10%15%20%25%30%35%40%45%50%55%60%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Cum Y/Y % Ch: BPP and BC: Total Building (Incl A&A): 1993-2011: R*1000 (Current Values) (Oct) (Source: StatsSA; BMI-BRSCU: BC Total RSA by Month and Type of Building1993-2008: % CUM BC BY SEGM & MNTH: Chart 15(2))
% CUM BC BY SEGM& MNTH % CUM BPP BY SEGM& MNTH
12 per. Mov. Avg. (% CUM BC BY SEGM& MNTH) 12 per. Mov. Avg. (% CUM BPP BY SEGM& MNTH)
© BMI-BRSCU© BMI-BRSCU
Total BC turned at about – 21% and move to positive growth by third quarter 2011 . . .
CUM YTD % CHANGE: TOTAL BPP & BC: 1994-2011 (OCT)www.strategicforum.co.za
Total BPP has turned at -35% and has breached zero in first quarter 2011 . . .
18
-1 000 000
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Total Building: BC: 1993-2011: Net Building in the Pipeline (NBIP): by Month: R*1000 (Current Values) (Oct)
(Source: StatsSA, BMI-BRSCU: BC Total RSA by Month and Type of Building1993-2008: NBIP (BPP-BC): Chart 16)
Total Building NBIP (BPP-BC) Total Building BC 12 per. Mov. Avg. (Total Building NBIP (BPP-BC)) 12 per. Mov. Avg. (Total Building BC)
© BMI-BRSCU© BMI-BRSCU
NET BUILDING IN THE PIPELINE: 1993-2011 (OCT)www.strategicforum.co.za
Total BC Trend-break occurred in mid 2006.
Recovery is on the way.
19 © BMI-BRSCU© BMI-BRSCU
RES & NR TOTAL BC: CUM ACTUAL 2011 VS 2010 (OCT): R MIOwww.strategicforum.co.za
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Res & NR Total: Cum Actual 2011: R*Mio 2 311 880 5 592 182 9 901 043 13 234 92716 913 22320 891 28824 378 79327 411 81431 193 15935 377 52739 570 70643 051 164
Res & NR Total: Cum Actual 2010: R*Mio 2 581 377 5 608 302 9 246 066 12 634 09117 614 54920 863 65225 638 99629 341 40732 305 37836 174 58640 367 76543 848 223
Res & NR Total: Cum Actual 2011 vs 2010 -10.44% -0.29% 7.08% 4.76% -3.98% 0.13% -4.92% -6.58% -3.44% -2.20% -1.97% -1.82%
-11%
-10%
-9%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
0
5 000 000
10 000 000
15 000 000
20 000 000
25 000 000
30 000 000
35 000 000
40 000 000
45 000 000
50 000 000
R*1
000
RES & NON RES TOTAL (INCL A&A): BC: CUM ACTUAL 2011 VERSUS 2010 BY MONTH: TOTAL RSA (OCT 2011)(Source: StatsSA, BMI-BRSCU Workings)
MAT FORECAST
Per
cen
tag
e D
iffe
ren
ce:
Cu
m A
ctu
al 2
011
vs 2
010
20 © BMI-BRSCU© BMI-BRSCU
% DIFFERENCE IN CUM Y/Y BC : ACTUAL 2011 VS 2010: OCTwww.strategicforum.co.za
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
No
m2
R'0
00
No
m2
R'0
00
No
m2
R'0
00
m2
R'0
00
R'0
00
m2
R'0
00
m2
R'0
00
m2
R'0
00
m2
R'0
00
R'0
00
m2
R'0
00
m2
R'0
00
R'0
00
R'0
00
Dwellings <80m2
Dwellings >80m2
Flats and TH Other Total Office &Banking
Shopping Ind&WH Other Total A&ADwellings
A&A Other A&ATotalTotal
% Difference in Cumulative Y/Y BC: Cum Actual Oct 2011 vs 2010 by Segment: Total RSA(Source: StatsSA, BMI-BRSCU Workings)
21 © BMI-BRSCU© BMI-BRSCU
CURRENT REALITY OF INVESTMENT IN BUILDINGBY SECTOR AND SEGMENT: 2010
0
1 049
3 714
1 333
215
2 971
9 092
954
8
19 334
1 358
1 714
3 075
712
2 725
2 866
1 053
13 503
6 246
3 846
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000
PRIVATE RESIDENTIAL
Dwelling-houses < 80 m2
Dwelling-houses > 80 m2
Townhouses & Flats
Other (Incl. hotels & casinos)
Additions & alterations
PUBLIC RESIDENTIAL
Affordable Housing
Public authorities.
Public corporations
TOTAL RESIDENTIAL
PRIVATE NON-RESIDENTIAL
Offices
Shops
Industrial & warehouse
Other
Additions & Alterations
PUBLIC NON-RESIDENTIAL
Public Authorities
Public Corporations
TOTAL NON RESIDENTIAL
Unrecorded Res Adds and Alts
Unrecorded Non Res Adds and Alts
INVESTMENT IN BUILDING BY SECTOR AND BY SEGMENT: 2010: M2*1000(TOTAL = 42 929 Million m2)
(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)
TOTAL = 42 929 Million m2
22 © BMI-BRSCU© BMI-BRSCU
CURRENT REALITY OF MAJOR BUILDING PRODUCTS BY PRODUCT: 2009
The market for major Building Product Groups by value: 2009 (Source: BMI-BRSCU)
4.40%
1.26%
7.28%
1.35%
1.36%
6.27%
12.84%
6.43%
13.42%
3.01%
2.61%
1.56%
10.16%
1.90%
1.98%
1.17%
0.33%
2.85%
2.95%
0.87%
0.25%
6.46%
8.27%
1.01%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Roofing and Vertical Cladding
Ceilings and Partitioning
Walling
Paving
Wall Tiles
Flooring
Cement
Aggregate and Sand
Reinforcing Steel and Sections
Sanware
Taps, Mixers and Fittings
Plumbing Pipes and Fittings
Pipes and Fittings
Geysers
Glass and Mirrors
Doors
Garage Doors
Frames
Roof Trusses
Windowsills, Fasciaboards and Bargeboards
Rainwater Goods
Decorative Paint
Flatboard (PB, MDF, Other)**
Insulation
Total value of major Building Product Groups = R103,4 Billion in 2009.
Major Building Product Groups account for 52,32% of Total Building and
Construction Materials and 31,4% of Total Investment in Building and Construction.
23 © BMI-BRSCU© BMI-BRSCU
THE LOCAL BUILDING LUMBER MARKET: 2001 – 2010 (NOV)
-
20 000
40 000
60 000
80 000
100 000
120 000
Jan
01
Ma
y 01
Sep
01
Jan
02
Ma
y 02
Sep
02
Jan
03
Ma
y 03
Sep
03
Jan
04
Ma
y 04
Sep
04
Jan
05
Ma
y 05
Sep
05
Jan
06
Ma
y 06
Sep
06
Jan
07
Ma
y 07
Sep
07
Jan
08
Ma
y 08
Sep
08
Jan
09
Ma
y 09
Sep
09
Jan
10
Ma
y 10
Sep
10
Jan
11
Ma
y 11
Sep
11
Cu
bic
Met
res
Lumber Sales by End-use: Local Building: January 2001 - November 2011 (m3)(Source: Crickmay & Associates, BMI-BRSCU Workings)
Local Building 12 per. Mov. Avg. (Local Building)
24 © BMI-BRSCU© BMI-BRSCU
LOCAL BUILDING LUMBER SALES VS TOTAL BC: 2002 – 2011 (NOVEMBER)
-50%
-30%
-10%
10%
30%
50%
70%
Jan
02
Apr
02
Jul 0
2
Oct
02
Jan
03
Apr
03
Jul 0
3
Oct
03
Jan
04
Apr
04
Jul 0
4
Oct
04
Jan
05
Apr
05
Jul 0
5
Oct
05
Jan
06
Apr
06
Jul 0
6
Oct
06
Jan
07
Apr
07
Jul 0
7
Oct
07
Jan
08
Apr
08
Jul 0
8
Oct
08
Jan
09
Apr
09
Jul 0
9
Oct
09
Jan
10
Apr
10
Jul 1
0
Oct
10
Jan
11
Apr
11
Jul 1
1
Oct
11
Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BC (m2): January 2002 - Nov 2011(Source: StatsSA; Crickmay Associates, BMI-BRSCU Workings)
Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total BC (m2)
12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total BC (m2))
25 © BMI-BRSCU© BMI-BRSCU
LOCAL BUILDING LUMBER SALES VS TOTAL BPP: 2002 – 2011 (NOVEMBER)
-50%
-30%
-10%
10%
30%
50%
70%
Jan
02
Apr
02
Jul 0
2
Oct
02
Jan
03
Apr
03
Jul 0
3
Oct
03
Jan
04
Apr
04
Jul 0
4
Oct
04
Jan
05
Apr
05
Jul 0
5
Oct
05
Jan
06
Apr
06
Jul 0
6
Oct
06
Jan
07
Apr
07
Jul 0
7
Oct
07
Jan
08
Apr
08
Jul 0
8
Oct
08
Jan
09
Apr
09
Jul 0
9
Oct
09
Jan
10
Apr
10
Jul 1
0
Oct
10
Jan
11
Apr
11
Jul 1
1
Oct
11
Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BPP (m2) : January 2002 - November 2011(Source: Crickmay Associates, BMI-BRSCU Workings)
Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total BPP (m2)
12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total BPP (m2))
Local Building Lumber Sales appear to be more closely correlated to Total BPP than to BC and also leads the revival?
26 © BMI-BRSCU
LOCAL BUILDING LUMBER SALES: CUM Y/Y 2011 VS 2010(NOVEMBER)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 Cum Y/Y Local Building 62 111 145 627 226 328 306 350 389 026 464 887 542 714 636 696 712 769 807 356 908 249 968 525
2011 Cum Y/Y Local Building 83 590 174 204 265 674 345 749 437 896 537 281 628 339 729 731 837 356 933 839 1 036 3 1 096 6
% Change Cum Y/Y Local Building: 2011 vs 2010 34.58% 19.62% 17.38% 12.86% 12.56% 15.57% 15.78% 14.61% 17.48% 15.67% 14.10% 13.22%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
200 000
400 000
600 000
800 000
1 000 000
1 200 000C
ub
ic M
etre
s
Lumber Sales by End-use: Local Building: Cum Y/Y November 2011 vs 2010(Source: Crickmay & Associates, BMI-BRSCU Workings)
MAT FORECAST
% C
han
ge
Cu
m Y
/Y L
oca
l Bu
ild
ing
: 20
11 v
s 2
010
27
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Gau
tra
in
Esk
om
Infr
ast
ruct
ure
Soc
cer
Wo
rld C
up
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
1993
/01
1993
/02
1993
/03
1993
/04
1994
/01
1994
/02
1994
/03
1994
/04
1995
/01
1995
/02
1995
/03
1995
/04
1996
/01
1996
/02
1996
/03
1996
/04
1997
/01
1997
/02
1997
/03
1997
/04
1998
/01
1998
/02
1998
/03
1998
/04
1999
/01
1999
/02
1999
/03
1999
/04
2000
/01
2000
/02
2000
/03
2000
/04
2001
/01
2001
/02
2001
/03
2001
/04
2002
/01
2002
/02
2002
/03
2002
/04
2003
/01
2003
/02
2003
/03
2003
/04
2004
/01
2004
/02
2004
/03
2004
/04
2005
/01
2005
/02
2005
/03
2005
/04
2006
/01
2006
/02
2006
/03
2006
/04
2007
/01
2007
/02
2007
/03
2007
/04
2008
/01
2008
/02
2008
/03
2008
/04
2009
/01
2009
/02
2009
/03
2009
/04
2010
/'01
2010
/'02
2010
/'03
2010
/'04
2011
/'01
2011
/'02
2011
/'03
2011
/'04
CU
M Q
/Q (
PR
EV
IOU
S Y
EA
R)
% C
HA
NG
E
Defining Events
R M
ILL
ION
S (
CU
RR
EN
T V
AL
UE
S)
GFCF CONSTRUCTION WORKS Q1 1993-Q3 2011: CURRENT VALUESCUMULATIVE Q ON Q (PREVIOUS YEAR) PERCENTAGE CHANGE(Source: SARB; BMI-BRSCU Workings)
Gross fixed capital formation: Construction works - Total (Investment) Cum Q on Q (Previous Year) % Change
CUM YTD Q3 2011 VS 2010 = + 4,21%
2010 VS 2009 = R166 267 MIO VS R165 516 MIO = + 0,45%ON TOP OF GROWTH OF + 30,18% IN 2009 VS 2008
© BMI-BRSCU© BMI-BRSCU
GFCF CONSTRUCTION: Q1 1993-Q3 2011 (SEPTEMBER)www.strategicforum.co.za
28 © BMI-BRSCU© BMI-BRSCU
GFCF CONSTRUCTION: CUM Q/Q 2011 VS 2010 (Q3)www.strategicforum.co.za
Cum GFCFQ1
Cum GFCFQ2
Cum GFCFQ3
Cum GFCFQ4
Cum GFCF Construction 2010 42 330 83 479 124 374 166 267
Cum GFCF Construction 2011 43 109 85 552 129 613 171 506
Cum Q/Q % Change 2011 vs 2010 1.84% 2.48% 4.21% 3.15%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
200 000
Cu
m Q
/Q %
Ch
ang
e
R M
illi
on
(C
urr
en
t P
ric
es
)
CUM Q/Q GFCF CONSTRUCTION: 2011 VS 2010 (Q3)(Source: SARB, BMI-BRSCU Workings)
MAT FORECAST
29 © BMI-BRSCU
DOMESTIC CEMENT SALES: 1997 – MAT* 2011 (* NOVEMBER)
6 000 000
7 000 000
8 000 000
9 000 000
10 000 000
11 000 000
12 000 000
13 000 000
14 000 000
15 000 000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Ton
ne
s
Annual Domestic Cement Sales: 1997 - MAT* 2011 (* Nov)(Source: Cement & Concrete Institute; BMI-BRSCU Workings)
30 © BMI-BRSCU
DOMESTIC CEMENT SALES BY MONTH: 1997 – 2011 (NOVEMBER)
400 000
500 000
600 000
700 000
800 000
900 000
1 000 000
1 100 000
1 200 000
1 300 000
1 400 000
1 500 000
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Ton
ne
s
Domestic Cement Sales by Month: 1998-2011 (Nov)(Source: Cement & Concrete Institute; BMI-BRSCU Workings)
Domestic Cement Sales by month 12 per. Mov. Avg. (Domestic Cement Sales by month)
31 © BMI-BRSCU
DOMESTIC CEMENT SALES vs BPP: CUM Y/Y % CHANGE BY MONTH: 1999 – 2011 (NOVEMBER)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Cumulative Y/Y percentage change by month:Domestic Cement Sales (Tonnes) vs BPP (M2): Jan 1999 - Nov 2011
(Source: StatsSA; Cement & Concrete Institute; BMI-BRSCU Workings)
Cum Y/Y % Change: Total Cement Sales (Tonnes)
Moving average (Cum Y/Y % Change: Total Cement Sales (Tonnes))
Cum Y/Y % Change Total BPP (m2)
Moving average (Cum Y/Y % Change Total BPP (m2))
32 © BMI-BRSCU
DOMESTIC CEMENT SALES vs BC: CUM Y/Y % CHANGE BY MONTH: 1999 – 2011 (NOVEMBER)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Cumulative Y/Y percentage change by month:Domestic Cement Sales (Tonnes) vs BC (M2): Jan 1999 - Nov 2011
(Source: StatsSA; Cement & Concrete Institute; BMI-BRSCU Workings)
Cum Y/Y % Change: Total Cement Sales (Tonnes)
Moving average (Cum Y/Y % Change: Total Cement Sales (Tonnes))
Cum Y/Y % Change Total BC (m2)
Moving average (Cum Y/Y % Change Total BC (m2))
Local Cement Sales appear to be more closely correlated to Total BPP than to BC and also leads the revival in BC?Related to Merchant anticipation of revival and stock build-up in anticipation?
33 © BMI-BRSCU
DOMESTIC CEMENT SALESCUM Y/Y COMPARISON BY MONTH: 2011 VS 2010 AND 2009 (NOV)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cum YTD sales: 2010
672676 1513264 2544081 3351901 4291219 5195076 6171117 7141120 8121192 9077975 10123882 10870396
Cum YTD sales 2011 & MAT Forecast
638749 1462683 2471585 3287922 4200506 5197006 6170010 7184949 8289826 9345495 10486743 11233257
% Change Cum YTD 2011 VS 2010
-0.050435871058280
6
-0.033425099652142
7
-0.028495948045679
3
-0.019087377580662
5
-0.021139214754595
3
0.000371505633411
262
-0.000179384056403
276
0.006137552652805
13
0.020764685775191
5
0.029469127200724
8
0.035842081130538
7
0.033380660649345
4
1,000,000
3,000,000
5,000,000
7,000,000
9,000,000
11,000,000
-3%
2%
Domestic Cement Sales: Cumulative YTD November 2011 vs 2010 and 2009(Source: Cement & Concrete Institute; BMI-BRSCU Workings)
To
nn
es
MAT FORECAST
Cu
mu
litiv
e %
C
ha
ng
e: Y
TD
2
01
1 v
s 2
01
0
34 © BMI-BRSCU
CURRENT REALITY: BUILDING & CONSTR: 2009-2011
BMI Est % Change BMI Est % Change BMI Est Q2 REV % Change GFCFPRIVATE RESIDENTIAL GFCF* BC** (BPP+BC)/2*** 2009 2010 GFCF* BC** (BPP+BC)/2*** 2010 2011 2011 2011 2011 Q2 2011 Dwelling-houses < 80 m2 2 271 1 107 2 271 -19.19% 1 835 918 1 835 10.90% 2 035 2 224 21.17% Dwelling-houses > 80 m2 14 614 7 307 14 614 -15.67% 12 323 6 162 12 323 2.90% 12 680 13 186 7.00% Townhouses & Flats 8 499 4 250 8 499 -33.58% 5 646 2 823 5 646 -9.65% 5 101 5 145 -8.86% Other (Incl. hotels & casinos) 1 003 501 1 003 20.56% 1 209 604 1 209 -24.50% 913 921 -23.82% Additions & alterations 8 419 13 618 8 419 -12.20% 7 392 3 696 7 392 5.22% 7 778 7 740 4.70%TOTAL PRIVATE RESIDENTIAL 34 806 34 806 26 783 34 806 -18.39% 28 405 28 405 14 203 28 405 0.36% 28 507 29 216 2.85%PUBLIC RESIDENTIAL - Affordable Housing 13 222 41.74% 18 742 10.00% 20 616 19 210 2.50% Public authorities. 5 213 5 213 -21.39% 4 098 4 098 5.00% 4 303 2 869 -30.00% Public corporations 10 10 250.00% 35 35 10.00% 39 33 -5.00% Private Business Enterprises 5 620 5 620 104.19% 11 476 11 476 5.00% 12 049 7 623 -33.57%TOTAL PUBLIC RESIDENTIAL 24 065 42.74% 15 609 34 350 7.73% 37 007 29 735 -13.44%TOTAL RESIDENTIAL (Incl AH) 58 871 6.60% 44 014 62 756 4.39% 65 514 58 951 -6.06%TOTAL GFCF RES (Excludes AH) 45 649 44 014 44 014 44 898 39 741 -9.71% 39 741
PRIVATE NON-RESIDENTIAL Offices 4 863 3 884 4 863 -25.50% 3 623 3 235 3 623 -25.00% 2 717 2 969 -18.05% Shops 5 725 6 114 5 725 -41.62% 3 342 3 400 3 342 -5.00% 3 175 3 168 -5.21% Industrial & warehouse 4 638 5 580 4 638 -20.52% 3 686 4 386 3 686 -3.00% 3 575 2 711 -26.46% Other 859 1 340 859 7.73% 926 1 216 926 -5.00% 879 1 297 40.10% Additions & Alterations 4 285 6 026 4 285 -9.79% 3 866 5 966 3 866 -20.00% 3 093 3 691 -4.53%TOTAL PRIVATE NON-RESIDENTIAL 20 371 20 371 22 944 20 371 -24.19% 15 443 15 443 18 202 15 443 -12.97% 13 440 13 835 -10.41%PUBLIC NON-RESIDENTIAL Public Authorities 15 239 15 239 55.00% 12 806 12 806 5.00% 13 446 12 113 -5.41% Public Corporations 4 344 4 344 25.83% 4 707 4 707 10.00% 5 178 4 452 -5.41% Private Business Enterprises 20 926 20 926 31 532 31 532 -15.00% 26 802 29 827 -5.41%TOTAL PUBLIC NON-RESIDENTIAL 40 509 40 509 21.07% 49 045 49 045 -7.38% 45 426 46 392 -5.41%TOTAL GFCF NON RESIDENTIAL 60 880 60 880 5.93% 64 488 64 488 -8.72% 58 866 60 228 -6.61% 60 228TOTAL GFCF RES AND NON RES 106 529 108 502 108 502 103 764 99 969 -7.86% 99 969 Unrecorded Res Additions and Alterations 24 090 1.47% 24 445 5.00% 25 668 24 445 4.70% Unrecorded Non Res Additions and Alterations 10 823 39.09% 15 054 -10.00% 13 549 15 054 -4.53%TOTAL UNRECORDED ADD'S & ALT'S 34 913 13.14% 39 500 -0.72% 39 216 39 500 0.00%TOTAL INVESTMENT IN BUILDING 154 664 7.81% 166 743 -1.89% 163 596 158 678 -4.84%BPP & BC as % of Total Investment in Building 35.67% 26.30% 25.64% 27.13%Private Sector as % of Total Investment in Building 58.25% 49.99% 49.61% 52.02%CONSTRUCTION Public Authorities 55 323 55 323 -0.31% 55 153 55 153 -10.00% 49 638 54 069 -1.97% Public Corporations 86 683 86 683 8.95% 94 442 94 442 -12.50% 82 637 92 586 -1.97% Private Business Enterprises 24 475 24 475 3.57% 25 349 25 349 -15.00% 21 547 24 851 -1.97%TOTAL INVESTMENT IN CONSTRUCTION 166 481 166 481 5.08% 174 944 174 944 -12.07% 153 821 171 506 -1.97% 171 506TOTAL INV IN BLDNG AND CONSTR 273 010 321 145 6.40% 283 446 341 687 -7.10% 317 418 330 184 -3.37%TOTAL GFCF CONSTRUCTION 166 481 166 481 174 944TOTAL GFCF BLDNG AND CONSTR 273 010 321 145 341 687* Res GFCF excludes Affordable Housing* Non Res GFCF includes Public Sector ** Stats SA*** StatsSA and BMI-BRSCU WorkingsSource: BMI-BRSCU
SHORTTERM OUTLOOK FOR THE BUILDING & CONSTR INDUSTRY: 2011: R*MILLION (CURRENT VALUE)SARB & StatsSA 2009 SARB & StatsSA 2010
35
MFA COMPOSITE LEADING INDICATOR (CLIBI)FOR THE SOUTH AFRICAN BUILDING INDUSTRY
0
10
20
30
40
50
60
70
80
90
100
| 71 | 74 | 77 | 80 | 83 | 86 | 89 | 92 | 95 | 98 | 01 | 04 | 07 | 10 | 13
Source: FNB / BER; SARB; MFA DATABASE
PE
SS
IMIS
M <
50
> O
PT
IMIS
M
OPTIMISM
PESSIMISM
Shaded areas represent the upswing phase of the business cycle
© BMI-BRSCU
The MFA Composite Leading Indicator for the South African Building Industry (CLIBI) recorded a peak of 69 in late 2004. The index dropped to 26 in 2009, reflecting a lower turning point. This building indicator rose to 32 in the first quarter of 2010. However, it dropped slightly to 31 during the last three quarters of 2010. It has continued at a level of 31 for the sixth consecutive quarter. This is the first time that this key indicator has moved sideways for more than a year. In a nutshell, this finding is a reflection of continuing poor business conditions in the South African building industry.
ANIMAL SPIRITS AND CONFIDENCEwww.strategicforum.co.za
?
36
Total Mortgage Advances: 2002 - 2010The Strategic Forum Scenarios: 2011-2020(Source: SARB; MFA DATABASE, BMI-BRSCU Workings)
2675
04
2599
27
2518
37
2674
81
2888
57
3033
39
3185
37
3265
00
3330
30
3180
44
3085
02
536880
223203
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
R M
illi
on
s (C
on
stan
t 20
10 V
alu
es)
High Road New York Scenario: 2011-2020Higher Middle Road London Scenario: 2011-2020Lower Middle Road Sao Paolo Scenario: 2011-2020Low Road Harari Scenario: 2011-2020Sao Paolo Scenario:2011-2020
Sao Paolo Scenariois Current
Most likely future Scenario
© BMI-BRSCU© BMI-BRSCU
STRATEGIC RESPONSEwww.strategicforum.co.za
R313 Billion decline in
only 3 years!
Under the High Road it could take a decade to get
back to the 2006 level!
37
AFFORDABLE HOUSING DELIVERY AND BACKLOG: 2002-2010LOWER MIDDLE ROAD SOYUZ AND HIGH ROAD COLUMBUS SCENARIO: 2011-2020
(Source: StatsSA and BMI-BRSCU Workings)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
AN
NU
AL
HO
US
ING
DE
LIV
ER
Y (
UN
ITS
)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
AN
NU
AL
HO
US
ING
BA
KL
OG
(U
NIT
S)
DOH Delivery: Lower Middle Road Soyuz Scenario DOH Delivery: High Road Columbus Scenario
Annual Housing Backlog under Columbus Scenario Annual Housing Backlog under Soyuz Scenario
© BMI-BRSCU© BMI-BRSCU
THE ROLE OF AFFORDABLE HOUSING IN BUILDING: 2011-2020www.strategicforum.co.za
3,12 Million houses built in next 10 years and
Backlog reduced to I million by 2020.
The target remains the eradication of all slums, or informal settlements, by 2014. For this to happen, some 500 000 new units a year must become available, according to the Department of Housing’s Strategic Plan.
38
TOTAL INVESTMENT IN BUILDING: 2000-2010 THE STRATEGIC FORUM SCENARIOS: 2011-2020
(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)
15,000
40,000
65,000
90,000
115,000
140,000
165,000
190,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
R M
ILL
ION
S (
2010
VA
LU
ES
)
TOTAL BUILDINGS : 2000-2007: LOWER MIDDLE ROAD SOYUZ SCENARIO: 2008-2015
1984 PEAK LEVEL OF INVESTMENT
TOTAL BUILDINGS HIGH ROAD COLUMBUS SCENARIO
TOTAL BUILDINGS LOW ROAD CHALLENGER SCENARIO
TOTAL BUILDINGS HIGHER MIDDLE ROAD APOLLO SCENARIO
1984 PEAK LEVEL OF INVESTMENT
CURRENT MOST LIKELY SCENARIOBETWEEN SOYUZ AND CHALLENGER
© BMI-BRSCU© BMI-BRSCU
SCENARIOS FOR THE BUILDING INDUSTRY: 2011-2020www.strategicforum.co.za
39
TOTAL INVESTMENT IN BUILDING: 2000-2010 THE STRATEGIC FORUM SCENARIOS: 2011-2020
(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)
15,000
40,000
65,000
90,000
115,000
140,000
165,000
190,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
R M
ILL
ION
S (
2010
VA
LU
ES
)
TOTAL BUILDINGS : 2000-2007: LOWER MIDDLE ROAD SOYUZ SCENARIO: 2008-2015
1984 PEAK LEVEL OF INVESTMENT
TOTAL BUILDINGS HIGH ROAD COLUMBUS SCENARIO
TOTAL BUILDINGS LOW ROAD CHALLENGER SCENARIO
TOTAL BUILDINGS HIGHER MIDDLE ROAD APOLLO SCENARIO
1984 PEAK LEVEL OF INVESTMENT
CURRENT MOST LIKELY SCENARIOBETWEEN SOYUZ AND CHALLENGER
© BMI-BRSCU© BMI-BRSCU
SCENARIOS FOR THE BUILDING INDUSTRY: 2011-2020www.strategicforum.co.za
The difference between “high road” and “lower middle road” could be R139 Billion and 300 000 jobs over the 10 years to 2020.
40 © BMI-BRSCU© BMI-BRSCU
TOTAL INVESTMENT IN CONSTRUCTION BY SEGMENT: 2002-2020www.strategicforum.co.za
INVESTMENT IN CONSTRUCTION: 2001-2010THE STRATEGIC FORUM SCENARIOS: 2011-2020
(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)
25,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
R M
ILL
ION
S (
2010
VA
LU
ES
)
MOTORWAY SCENARIO: 2007-2015 HIGHWAY SCENARIO: 2007-2015 FREEWAY SCENARIO: 2001-2015
BYWAY SCENARIO: 2001-2015 Peak 1980 Level
The currentMOST LIKELY FUTURE
is theFREEWAY SCENARIO
1980 PEAK LEVEL OF INVESTMENT
41
2011-2020 Average PRIVATE RESIDENTIAL R*Million R*Million % % Dwelling-houses < 80 m2 29,472 2,947 1.69% 0.94% Dwelling-houses > 80 m2 176,887 17,689 10.12% 5.67% Townhouses & Flats 102,292 10,229 5.85% 3.28% Other (Incl. hotels & casinos) 8,420 842 0.48% 0.27% Additions & alterations 109,727 10,973 6.28% 3.52%PUBLIC RESIDENTIAL Affordable Housing 201,003 20,100 11.50% 6.44% Public authorities. 52,901 5,290 3.03% 1.70% Public corporations 309 31 0.02% 0.01%TOTAL RESIDENTIAL 681,011 68,101 38.95% 21.83%PRIVATE NON-RESIDENTIAL Offices 89,860 8,986 5.14% 2.88% Shops 103,453 10,345 5.92% 3.32% Industrial & warehouse 138,568 13,857 7.92% 4.44% Other 19,151 1,915 1.10% 0.61% Additions & Alterations 139,014 13,901 7.95% 4.46%PUBLIC NON-RESIDENTIAL Public Authorities 146,557 14,656 8.38% 4.70% Public Corporations 47,401 4,740 2.71% 1.52%TOTAL NON RESIDENTIAL 684,005 68,400 39.12% 21.93% Unrecorded Res Add's and Alt's 235,437 23,544 13.46% 7.55% Unrecorded Non Res Add's and Alt's 148,133 14,813 8.47% 4.75%GRAND TOTAL 1,748,586 174,859 100.00% 56.06%
CONSTRUCTION Roads Streets, Bridges etc 374,509 37,451 27.33% 12.01% Waterworks 126,766 12,677 9.25% 4.06% Sewerage 57,355 5,736 4.18% 1.84% Other Construction Works 365,032 36,503 26.63% 11.70% Private Sector 446,844 44,684 32.60% 14.33%TOTAL CONSTRUCTION 1,370,507 137,051 100.00% 43.94%TOTAL BLDNG AND CONSTR 3,119,092 311,909 100.00%3 years (2010-2012) 935,7285 years (2010-2014) 1,559,54611 years (2010-2020) 3,431,001
SECTOR AND SEGMENTINVESTMENT IN BUILDING & CONSTRUCTION: 2011-2020: LMR SOYUZ SCENARIO
© BMI-BRSCU© BMI-BRSCU
TOTAL INVESTMENT IN BUILDING & CONSTRUCTION BY SEGMENT: 2011-2020
42 © BMI-BRSCU
CURRENT REALITY: BUILDING & CONSTR: 2009-2011
Sector and Segment 2010 2011 2012 2013 2014 2015Total Private Residential -18.39% 2.85% 3.03% 6.01% 9.00% -2.99%Total Public Residential 42.74% -13.44% 2.53% 0.82% -2.45% 0.21%Total Residential 6.60% -6.06% 2.83% 3.96% 4.62% -1.85%Total Private Non-Residential -24.19% -10.41% -11.02% 2.99% 5.99% 14.99%Total Public Non-Residential 21.07% -5.41% 0.00% 12.26% 7.02% 2.31%Total Non Residential 5.93% -6.61% -8.01% 5.74% 7.02% 10.91%Total Unrecorded Additions & Alterations 13.14% 0.00% -10.57% -5.43% 10.77% 0.33%Total Investment In Building 7.81% -4.84% -0.04% 0.02% 0.07% 0.03%Total Investment In Construction 5.08% -1.97% -5.59% -8.88% 8.44% 7.19%Total Investment In Building and Construction 6.40% -3.37% -4.91% -2.80% 7.49% 4.91%
Year on Year Growth INVESTMENT IN BUILDING AND CONSTRUCTION: 2010-2015 (CONSTANT 2010 VALUES) (REVISED DEC 2011)
43 © BMI-BRSCU© BMI-BRSCU
TowardsBuilding, the Engine for growth and wealth creation
Dr. Llewellyn B. LewisDecember 2011
THE STRATEGIC FORUM
A place of assembly for strategic conversations
THE STRATEGIC FORUMwww.strategicforum.co.za
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