Construction and building material sales positive news for the economy in challenging times, says SEIFSA

16 July 2021
By: Mpho Lukoto
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The improvement in the sales of construction and building material is encouraging amid the challenging economic environment, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

Wholesale trade sales data released by Statistics South Africa (StatsSA) today showed an increase in sales of 31.3% in May 2021 compared to May 2020, to reach R158-billion in constant terms. Month on month, sales increased 6.3% from April. Year to date, wholesale trade sales have increased by 14.5%.

Sales of construction and building materials increased to R13-billion from R11-billion in April 2021, with expansionary year-on-year growth of 115.9% in May 2021.

Within the Metals and Engineering sector, the increase in the sale of construction and building material was driven mainly by the increase in the demand for building supplies across all segments including non-ferrous metal products, basic iron and steel products, as well as other fabricated metal products.

Commenting on the data, SEIFSA Chief Economist Chifipa Mhango said the figures are a sign that economic recovery in South Africa remains on track amid improved trading and industrial production activity. He said, however, that current unrest in the country threatens to halt this progress as it has disrupted supply chains across all sectors.

He said the Government needs to urgently mobilise all its resources to ensure stability in order to ensure that economic recovery is not derailed. “Our revised indications suggest that if the unrest continues further, production and sales of products within the M&E sector will be affected, as road freight transport, which is a core element of input supply, has been massively disrupted, thus negatively affecting the current positive trend in construction and building material sales,” he said.