The FNB/Bureau for Economic Research Building Confidence Index gained two points to 40 in the third quarter – indicating that 60% of respondents across the building sector value chain are dissatisfied with prevailing business conditions.

The two-point increase was supported by a marked increase in business confidence among hardware retailers and quantity surveyors as main contractor confidence remained relatively stable.

However, the report says that business confidence among non-residential builders fell to 43 points in the third quarter, which is significantly lower than the multi-year high of 75 in the first quarter.

“The survey results over the last two quarters revealed a sharp reversal in the broadly positive trend in non-residential activity seen between 2024 and the first quarter of 2026.

“This, more acutely than in the rest of the building sector, likely reflects the impact of higher input costs on the financial viability of projects,” highlights FNB senior economist Siphamandla Mkhwanazi.

In contrast, activity among residential builders has improved in the third quarter with expectations for new work over the next quarter remaining positive.

Mkhwanazi explains that these developments have taken place amid the report from Statistics South Africa, which shows that the real value of building investment declined by a yearly rate of 1.5% in the second quarter, from an 8.4% fall in the first quarter.

However, he adds that the confidence of quantity surveyors has increased to 56 points, marking its highest level since the fourth quarter of 2016.

Encouragingly, Mkhwanazi also notes that architects remained relatively busy during the third quarter and this has been measured as above average for more than two years.

“Work among architects has been slowly gaining momentum over the last few quarters and suggests that there is an underlying demand for building work in the economy.

“Greater economic certainty, along with better efficiency within municipal planning offices could result in a reasonably quick rebound in building work,” he says.