Civil construction confidence soars to 11-year high, FNB/BER Index shows

Business sentiment about construction activity among civil engineering contractors improved to a multi-year high in the fourth quarter of 2025, boosted also by much better profitability.

The FNB/BER Civil Confidence Index gained nine points to reach 52 in the fourth quarter of 2025. The underlying data measuring construction activity and overall profitability improved noticeably.

"The civil construction survey is the best non-official gauge for infrastructure investment. On that score, the survey results are quite positive. However, the spread of activity seems to be clustered in renewable energy generation and mining, which is not bad – or even surprising – but does suggest that key reforms in other areas of the economy are still lacking," said Siphamandla Mkhwanazi, senior economist at FNB.

In terms of the short-term outlook for work, the survey results were mixed, with firms' own expectations ticking up further, while order books were only marginally better.

After showing a two-index-point rise in the third quarter of 2025, the FNB/BER Civil Confidence Index's nine index point gain marked the joint best level - along with the third quarter of 2016 - in 11 years.

The current reading means more than 50% of respondents are satisfied with prevailing business conditions.

The index findings point to a much slower decline in activity in the fourth quarter off the back of renewable energy and mining projects - this after Stats SA data showed the real value of construction works contracted by 3% year-on-year in the third quarter of 2025, said Mkhwanazi.

In addition, overall sector profitability was higher - the index measuring the growth in overall profitability registered its best level since the end of 2007.

"It is a stretch to claim that profit margins are as generous as they were in the run-up to the 2010 FIFA World Cup final - when work was much more abundant - but it is clear that civil contractors are enjoying better margins. This undoubtedly contributed to the better business mood," said Mkhwanazi.

Looking ahead, survey respondents expect activity to continue on this upward trajectory in the first quarter of 2026.However, order books, as proxied by the rating of new construction demand as a business constraint, were only slightly better compared to the third quarter of 2025.

"The higher sentiment was in step with better activity and overall profitability which suggests a potential rebound in the sector. The forward-looking indicators, while mixed, suggest that the momentum will likely be maintained over the near-term," said Mkhwanazi.

The Index findings appear also in line with the Afrimat Construction Index for the third quarter of 2025, that was released last month, and where economist Dr Roelof Botha predicted a further recovery in construction activity, especially due to the latest decrease in the prime overdraft rate to 10.25%.

He made this forecast after the Afrimat Construction Index showed an impressive double-digit quarter-on-quarter increase in the third quarter of 2025, and represented a significant improvement over the second quarter results.

The FNB/BER civil confidence index can vary between a maximum of 100, which indicates that all respondents are satisfied with prevailing business conditions, and a minimum of zero, indicating that all respondents are dissatisfied.

A level of 50 indicates that the respondents are equally divided between those satisfied and dissatisfied. Fieldwork for the fourth quarter survey was done between November 10 and November 24, 2025.

BUSINESS REPORT