The FNB/BER Building Confidence Index fell sharply by five points to 36 in the second quarter of 2025, indicating a significant deterioration in sentiment within South Africa’s construction sector. Nearly 65% of industry respondents expressed dissatisfaction with prevailing business conditions, with the residential building sector bearing the brunt of the downturn. Real residential construction spending declined by 8.4% year-on-year in the first quarter of 2025, according to Stats SA, prompting main contractor confidence to fall to 35—the lowest since Q3 2022.

FNB senior economist Siphamandla Mkhwanazi highlighted deteriorating order books and profitability in the residential sector, which continues to drag overall performance. Conversely, the non-residential sector has outperformed expectations, benefiting from a low base and growing demand for industrial and office space. Confidence among architects remains above average, though subdued at 38 for the second quarter running. Quantity surveyor sentiment improved to 50, the highest level since Q2 2017, driven by increased activity in the non-residential domain.

Despite this momentum at the project initiation stage, systemic issues such as delayed project approvals and slow client payments continue to hinder progress. Meanwhile, hardware retailer confidence plunged by 24 points, largely due to margin pressure, despite stable sales volumes. Optimism around future sales is tempered by concerns that recent gains—partly fuelled by the two-pot retirement reform—may fade.

In contrast, building material manufacturers saw a modest rise in confidence, although actual domestic and export sales declined. Overall, the sector remains under pressure, with recovery hinging on broader economic and demand improvements.