Tuesday, 19 February 2013 11:15

Highlights and Challenges of 2012

The year 2012 has been described as "bittersweet" and I think this is probably one of the most appropriate descriptions of conditions in the industry. While the sharp declines in 2009 and 2010, weakened to a more sideways move, with a glimmer of recovery here and there, conditions remain well below the peaks experienced in 2007/08. Companies were forced to streamline operations to protect dwindling profit margins, while many suppliers downsized production. Amidst all of this the industry also had to cope with higher production costs and less of a leverage to pass on those costs to consumers because of a slowdown in demand. The building industry is certainly harder hit by the drop in private sector spending, while government projects are vulnerable to management inefficiencies in terms of project planning, implementation and managing, while lower revenue is making it extremely difficult to balance budgetary allocations. Confidence levels remain well below the 50 (neutral) index level, while plans approved by the private sector, tenders and cement sales amongst others, have fallen back to , or very close to, pre-boom levels.