Sustained increase in sales of construction and building material is positive news for the metals industries, says SEIFSA

Sustained increase in sales of construction and building material is positive news for the metals industries, says SEIFSA

JOHANNESBURG, 17 JUNE 2021 – The continued uptick in sales of construction and building materials is positive news for the Metals and Engineering (M&E) industries as it signals growing demand for the sector’s products, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

Wholesale trade sales data released by Statistics South Africa (StatsSA) today showed a massive 85.5% increase in sales in April 2021 compared to April 2020, while month-on-month wholesale trade sales decreased by 0.1% in April 2021 compared to March 2021 due to the number of public holidays in the month. 

Sales of construction and building materials declined slightly from R12.8-billion in March 2021 to R11-billion in April 2021, with expansionary year-on-year growth of 815.3% in April 2021. The increase was mainly driven by the increase in demand for building supplies across all segments such as basic steel and non-ferrous metal products, fabricated metal products as well as structural metal products, cement and bricks, among others, as construction activity picked amid the easing of COVID-19 alert level restrictions. Residential home improvements also contributed to the sales growth in construction material. The increase in M&E production sales, which has averaged R75-billion on a monthly basis in the last four months to April 2021 also supports the trend.

SEIFSA Chief Economist Chifipa Mhango said the positive data is an indication that economic recovery remains cautiously on track following the relaxation of lockdown measures put in place to curb the spread of COVID-19 from March last year. These restrictions limited trading and industrial activity for the better part of 2020.

“The latest data bodes well for the M&E industries as it signals an increased demand for its products as economic recovery in the country begins to gain momentum,” Mr Mhango said.

He, however, cautioned that the Government will need to speed up the COVID-19 vaccination rollout to ensure that more people are able to return to work thus further supporting economic activity. He called on the Government to help further drive demand for the sector’s products be ensuring that State-owned entities comply with local content requirements in Government infrastructure projects in line with the recently launched Steel and Fabrication Master Plan.

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