By Johan Bosch (CEO Tusck Projects)
15 January 2025
According to Statistics South Africa's latest construction price index (CIPI), overall costs increased by an average of just 3.4% year-on-year. However, several key materials and inputs experienced significant price hikes. Fittings rose by 13.9% year-on-year, bricks by 7.9%, electrical components by 11.4%, and plants and equipment by 7.7%.
Despite rising costs, some reports indicate that cement sales increased by 5% year-on-year, with expectations for further positive growth in 2025. So, where will these cement sales be directed?
As outlined in the 2024 National Budget Speech, spending for the 2025/2026 financial year will strategically target specific developmental areas essential for progress. The top three spending priorities will be transport and logistics, with over R100 billion allocated to improving port, rail, and road infrastructure, energy, with over R70 billion, and water and sanitation infrastructure with nearly R60 billion. This points to a significant boost for projects in the latter part of the 2025/2026 financial year, although a modest growth of 2.9% is anticipated for 2025 overall.
With stabilization of the national grid and Eskom's longest period without load shedding to date, factors like these are also contributing to positive growth. However, residential sales are expected to remain subdued, particularly with high interest rates that are not decreasing as quickly as anticipated. This will impede industry recovery. Ultimately, the general outlook for 2025 is optimistic with significant opportunities for the industry expected. But what key drivers can we anticipate this year in the projects market? Here is Tusck Projects' examinations and Construction outlook forecast for 2025:
Infrastructure Development projects
Energy-efficient homes - focus on Solar and EV chargers
Renewable Energy - Wind and Solar Farms
Commercial Developments - Big focus on mixed development
Selling and development of current white space structures within existing Data Centers.
Whatever the outcome this year, Tusck Projects will ensure to examine all factors every quarter and align our focus on the correct markets for our Clients.
Wishing all our Clients a prosperous and safe 2025!
Best regards,
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