RISE IN CONSTRUCTION AND BUILDING MATERIAL SALES SHOWS SIGNS OF GREEN SHOOTS FOR ECONOMY, SAYS SEIFSA

JOHANNESBURG, 18 MARCH 2021 – The uptick in sales of construction and building
materials, amid increased construction activity, is encouraging and bodes well for the
Metals and Engineering (M&E) sector, the Steel and Engineering Industries Federation
of Southern Africa (SEIFSA), said today.

SEIFSA Chief Economist Chifipa Mhango said the increase in the sale of construction
and building material was mainly driven by the steady easing of lockdown restrictions,
which led to an increase in demand of building supplies such as steel, cement and bricks,
among others. However, Mr Mhango expressed concern about the accompanying decline
in wholesale trade sales.

Wholesale trade sales data released by Statistics South Africa (StatsSA) today showed
a sales decline of 7.1% in January, compared to January 2020. Month-on-month
wholesale trade sales decreased by 0.6% in January, when compared with December
2020. However, sales of construction and building materials increased from R8.9 billion
in December 2020 to R10.5 billion in January 2021, with expansionary year-on-year
growth of 45.1 percent in January 2021.

Mr Mhango said the increase in the sale of construction and building material was positive
news for the M&E sector. He said this improvement was attributed to the increase in
construction activity, which followed the relaxation of COVID-19 lockdown regulations, as
more workers returned to work. He said it coincided with a welcome increase in M&E
production sales, which improved significantly from R58 billion in December 2020 to R63
billion in January 2021.

“As the economy opens up and more COVID-19 vaccines are rolled out, we anticipate
further green shoots in the sale of construction building materials. The rolling out of key
Government infrastructure projects to the total value of R791.2 billion in public sector
spending into the next three fiscal years is also good news to the M&E sector, as we
expect demand for construction and building materials to improve further,” Mr Mhango
said.

Issued by:
Mpho Lukoto
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: mpho@seifsa.co.za
Web: www.seifsa.co.za