Making sense in the digital age: March 2012

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Sensemaking in the Digital Age presents incredible opportunities for sharing information in a new way. No boundaries, instantaneous communication, trashing the old paradigm that knowledge is power and must be kept close to the chest.

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Making sense in the digital age: March 2012

  1. 1. THE STRATEGIC FORUM www.strategicforum.co.za Studium Ad Prosperandum •• BUILDING RESEARCH BUILDING RESEARCH BMI BMI STRATEGY CONSULTING STRATEGY CONSULTING UNIT cc UNIT cc Voluntas in Conveniendum Reg. No. 2002/105109/23 THE STRATEGIC FORUM A place of assembly for strategic conversations Towards Making sense of the Building-, Construction- and Property-Industry: SENSEMAKING IN THE DIGITAL AGE Dr. Llewellyn B. Lewis MARCH 20121 © BMI-BRSCU
  2. 2. KNOWN AND UNKNOWN www.strategicforum.co.za “Reports that say something hasn’t happened are always interesting to me because as we know, there are known knowns: there are things we know we know. We also know there are known unknowns: that is to say we know there are some things (we know) we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if we look throughout the history of our country and other free countries, it is the latter category that tends to be the difficult one. “At first glance, the logic may seem obscure. But behind the enigmatic language is a simple truth about knowledge: there are many things of which we are completely unaware – in fact there are things of which we are so unaware, we don’t even know we are unaware of them.2
  3. 3. KNOWN AND UNKNOWN www.strategicforum.co.za All our knowledge is about the past, but all our decisions are about the future. What we know we What we don’t know we don’t know don’t know What we know Most of what we need to know to make good decisions today is outside our comprehension: we don’t even know it’s there.3
  4. 4. www.strategicforum.co.za PROPERTY OWNERSHIP LISTED PROPERTY SECTOR ENGINE FOR GROWTH EMPLOYMENT MARKET CAPITALISATION AND WEALTH CREATION IN BUILDING & CONSTRUCTION > R100 BILLION R3,8 TRILLION RES PROPERTY > 1 000 000 PEOPLE R1,3 TRILLION NON RES PROPERTY PRIMARY AND SECONDARY PROPERTY MARKET ANNUAL HOUSING NEED URBAN HOUSING R267 BILLION PA MORTGAGE BACKLOG > 1,5 MILLION ADVANCES PA (POP. GROWTH ONLY) UNITS IN 2010 R1000 BIO MORTGAGES O/S 250 000 INTEGRATED HOUSING FTHB SUBSIDIES (1,9% OF BUDGET = R13,8 BILLION) RESIDENTIAL AND BUILDING INV. (500 000 HOUSING UNITS) NON RES BPP AND R108,5* BILLION INVESTMENT IN AFFORDABLE HOUSING BUILDINGS COMPLETED (BC) (20,8% OF GFCF) (R1,4 TRILLION 2010-2020) GOVERNMENT BUDGET GFCF GDP R798,9 BILLION R521,6 BILLION R2663 BILLION (22% OF GDP) (30% OF GDP) GOVERNMENT CONSTR. INV. TRANSFER DUTY INFRASTRUCTURE SPEND R174,9 BILLION R8- R9 BILLION PA (R846 BILLION 2010-2020) (33,5% OF GDFI) * When the UNRECORDED Home Improvement and Affordable Housing is taken into4 account Building Investment = 30,5% of GFCF © BMI-BRSCU
  5. 5. www.strategicforum.co.za PROPERTY OWNERSHIP LISTED PROPERTY SECTOR ENGINE FOR GROWTH MARKET CAPITALISATION It is estimated that for every R1 spent EMPLOYMENT AND WEALTH CREATION > R100 BILLION on infrastructure, R1.40000 &added to a R3,8 TRILLION RES PROPERTY IN BUILDING CONSTRUCTION > 1 is 000 PEOPLE “Unless the Housing Market TRILLION NON RES PROPERTY R1,3 country’s gross domestic product. recovers, the Economy will PPP’s are the ideal vehicle for funding not recover.” SECONDARY PRIMARY AND (Warren Buffet, CNN, ANNUAL the gaps in infrastructure in Africa. HOUSING PROPERTY MARKET 4 October 2011) NEED URBAN HOUSING R267 BILLION PA MORTGAGE (Deloittes research, BACKLOG > 1,5 MILLION May 2011) ADVANCES PA (POP. GROWTH ONLY) UNITS IN 2010 R1000 BIO MORTGAGES O/S 250 000 INTEGRATED HOUSING FTHB SUBSIDIES (1,9% OF BUDGET = R13,8 BILLION) RESIDENTIAL AND BUILDING INV. (500 000 HOUSING UNITS) NON RES BPP AND R108,5* BILLION INVESTMENT IN AFFORDABLE HOUSING BUILDINGS COMPLETED (BC) (20,8% OF GFCF) (R1,4 TRILLION 2010-2020) GOVERNMENT BUDGET GFCF The UK Government plan to GDP R798,9 BILLION R521,6 BILLION R2663 BILLION promote building. “It clearly (30% OF GDP) has (22% OF GDP) recognised the need to boost house building, both to address GOVERNMENT TRANSFER DUTY CONSTR. INV. the housing crisis and to create INFRASTRUCTURE SPEND R174,9 BILLION R8- R9 BILLION PA (R846 BILLION 2010-2020) (33,5% OF GDFI) jobs.” (Business Day, 22 November 2011) * When the UNRECORDED Home Improvement and Affordable Housing is taken into5 account Building Investment = 30,5% of GFCF © BMI-BRSCU
  6. 6. CURRENT REALITY: BUILDING AND CONSTR 2011* EST Q1 2011 www.strategicforum.co.za CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011* BUILDING INVESTMENT BUILDING & CONSTRUCTION INVESTMENT CONSTRUCTION INVESTMENT R151 341 MILLION R322 847 MILLION R171 506 MILL CONTRACTOR (50,8%) RESIDENTIAL INVESTMENT R65 602 MIO R12 775 MILLION R58 951 LABOUR (40%) R129 138 MIO SUBCONTRACTOR (49,2%) NON RESIDENTIAL INVESTMENT R63 536 MIO R60 228 MILLION UNRECORDED MATERIAL (60%) DIRECT TO USER (40%) ADDITIONS AND ALT’S INVEST** R193 708 MIO R77 483 MILLION R32 163 MILLION LARGE CHAIN BLDRS MERCHANT INDIRECT VIA DISTRIBUTION LARGE IND BUILDERS MERCHANT (25%) (60%) (10%) R48 427 MILLION R116 225 MILLION R19 371 MILLION SPECIALIST SHOP LOCAL HARDWARE STORE HYPERMARKET/SUPERMARKET (5%) (15%) (5%) R9 685 MILLION R29 056 MILLION R9 685 MILLION * ESTIMATED Q1 2011 * 2010 Prices6 ** Residential and Non Residential © BMI-BRSCU
  7. 7. STRATEGIC RESPONSE www.strategicforum.co.za Summarised MBSA Summit Decisions ? To investigate the establishment of a multi- representative Industry Forum that would meet 2 to 3 times per annum To promote building as the Engine for Growth, nation building and wealth creation (through home ownership) by way of effective communication with leaders in all the economic sectors To establish a Task Force to unpack the R846 billion infrastructure budgets and investment for all public sector work, including affordable housing; to determine the impediments to the delivery thereof; to ensure a constant work flow and uphold quality standards, measured against annually assessed programmes, and to explore and prioritise the effective implementation of national infrastructure maintenance strategies. The formation of an inclusive forum to analyse the 8 000 projects within the Department of Human Settlements. To maximise employment opportunities by correct retro-fitting of existing buildings; maximise reduction of carbon emissions, and pursue green best practice approaches for engineering services in line with” green building”. (February 2011)7 © BMI-BRSCU
  8. 8. STRATEGIC RESPONSE www.strategicforum.co.za Summarised MBSA Summit Decisions ? To investigate the establishment of a multi- representative Industry Forum that would meet 2 to 3 times per annum To promote building as the Engine for Growth, nation building and wealth creation (through home ownership) by way of effective communication with Towards developing a Co- leaders in all the economic sectors operative mindset and To establish a Task Force to unpack the R846 cross boundary billion infrastructure budgets and investment for all networking for the Industry? public sector work, including affordable housing; to determine the impediments to the delivery thereof; to ensure a constant work flow and uphold quality standards, measured against annually assessed First step towards developing programmes, and to explore and prioritise the effective a Vision for the Industry? implementation of national infrastructure maintenance strategies. The formation of an inclusive forum to analyse Asking the right questions. the 8 000 projects within the Department of Human Turning known unknowns Settlements. into known knowns. To maximise employment opportunities by correct retro-fitting of existing buildings; maximise reduction of carbon emissions, and pursue green best practice approaches for engineering services in line with” green building”. (February 2011)8 © BMI-BRSCU
  9. 9. Typically the questions were: • Is it NEW money? • What is the definition of Construction? • Does it include both Building and Construction? • Does it include the other components of GFCF, ie Machinery and Equipment, Transport Equipment and Transfer Costs? • Where are the Houses being built, how can we find out?9 © BMI-BRSCU
  10. 10. Infrastructure Inputs Monitoring Project (IIMP) 28 September 2011 The purpose of the Infrastructure Dialogue on the IIMP was to acquaint stakeholders with the key findings of the 2011 IIMP study and the demand for and supply of inputs to the infrastructure sector. The dialogue was attended by some 50 stakeholders from the public and private sectors. The following inputs were provided as part of the dialogue: •Keynote address – Infrastructure Inputs Monitoring Project: Dr Zavareh Rustomjee (IIMP) • Panelists Perspectives: Mr Mahesh Fakir, The Presidency: DPME Dr Llewellyn Lewis: BMI • Plenary discussion focusing on key issues Mr Richard Goode: DBSA (Facilitator) Copies of the resource documents and agenda can be found on the Infrastructure Dialogues website www.infrastructuredialogues.co.za SEE PRESENTATION BY DR RUSTOMJEE FOR BETTER UNDERSTANDING.10
  11. 11. 11
  12. 12. 12
  13. 13. The DBSA Infrastructure monitoring model13
  14. 14. 14 © BMI-BRSCU
  15. 15. Infrastructure Expenditure by Infrastructure Type (Rm) Table 1 Public Sector Infrastructure Expenditure By Infrastructure Type R m Select on or more Category (Multiple Items) Sum of R Value Column Labels Row Labels 2010/11 2011/12 2012/13 2013/14 2011/12-2013/14 Buildings 38031 47286 70539 82026 Electricity and Energy 125290 137611 141968 144767 H ousing 18156 21440 23489 25101 Roads 45971 43250 43292 38475 Telecommunication 2035 1572 820 1071 Transport 23366 23924 22796 25891 Water 20992 25872 24325 27100 Grand Total 273841 300955 327229 344431 972615 Source: DBSA IIMP Infrastructure research, 201215 © BMI-BRSCU
  16. 16. THE STRATEGIC FORUM www.strategicforum.co.za16 © BMI-BRSCU
  17. 17. SHORTTERM OUTLOOK FOR THE BUILDING & CONSTR INDUSTRY: 2011: R*MILLION (CURRENT VALUE) BMI Est % Change BMI Est Q4 REV % Change GFCF PRIVATE RESIDENTIAL 2010 2011 2011 2011 2011 Q4 2011 Dwelling-houses < 80 m2 1 835 10.90% 2 035 2 255 22.88% Dwelling-houses > 80 m2 12 323 2.90% 12 680 13 372 8.51% Townhouses & Flats 5 646 -9.65% 5 101 4 845 -14.18% Other (Incl. hotels & casinos) 1 209 -24.50% 913 863 -28.59% Additions & alterations 7 392 5.22% 7 778 7 871 6.48% TOTAL PRIVATE RESIDENTIAL 28 405 0.36% 28 507 29 207 2.82% PUBLIC RESIDENTIAL - Affordable Housing 18 742 10.00% 20 616 19 210 2.50% Public authorities. 4 098 5.00% 4 303 3 021 -26.28% Public corporations 35 10.00% 39 33 -5.00% Private Business Enterprises 11 476 5.00% 12 049 7 879 -31.34% TOTAL PUBLIC RESIDENTIAL 34 350 7.73% 37 007 30 144 -12.25% TOTAL RESIDENTIAL (Incl AH) 62 756 4.39% 65 514 59 351 -5.43% TOTAL GFCF RES (Excludes AH) 44 014 44 898 40 140 -8.80% 40 140 PRIVATE NON-RESIDENTIAL Offices 3 623 -25.00% 2 717 2 352 -35.09% Shops 3 342 -5.00% 3 175 3 309 -1.00% Industrial & warehouse 3 686 -3.00% 3 575 3 140 -14.81% Other 926 -5.00% 879 1 269 37.07% Additions & Alterations 3 866 -20.00% 3 093 3 601 -6.84% TOTAL PRIVATE NON-RESIDENTIAL 15 443 -12.97% 13 440 13 671 -11.47% PUBLIC NON-RESIDENTIAL Public Authorities 12 806 5.00% 13 446 12 345 -3.60% Public Corporations 4 707 10.00% 5 178 4 538 -3.60% Private Business Enterprises 31 532 -15.00% 26 802 30 398 -3.60% TOTAL PUBLIC NON-RESIDENTIAL 49 045 -7.38% 45 426 47 280 -3.60% TOTAL GFCF NON RESIDENTIAL 64 488 -8.72% 58 866 60 951 -5.48% 60 951 TOTAL GFCF RES AND NON RES 108 502 103 764 101 092 -6.83% 101 091 Unrecorded Res Additions and Alterations 28 664 5.00% 30 097 28 117 6.48% Unrecorded Non Res Additions and Alterations 4 119 -10.00% 3 707 4 046 -6.84% TOTAL UNRECORDED ADDS & ALTS 32 783 3.12% 33 805 32 163 -1.89% TOTAL INVESTMENT IN BUILDING 160 027 -1.15% 158 185 152 465 -4.73% BPP & BC as % of Total Investment in Building 27.40% 26.52% 28.12% Private Sector as % of Total Investment in Building 47.89% 47.89% 49.22% CONSTRUCTION General government 55 153 -10.00% 55 153 55 605 0.82% Public corporations 94 442 -12.50% 94 442 95 216 0.82% Private Business Enterprises 25 349 -15.00% 25 349 25 557 0.82% TOTAL INVESTMENT IN CONSTRUCTION 174 944 0.00% 174 944 176 378 0.82% 176 378 TOTAL INV IN BLDNG AND CONSTR 334 971 -0.55% 333 129 328 843 -1.83% TOTAL GFCF CONSTRUCTION 174 944 TOTAL GFCF BLDNG AND CONSTR 334 971 * Res GFCF excludes Affordable Housing * Non Res GFCF includes Public Sector ** Stats SA *** StatsSA and BMI-BRSCU Workings Source: BMI-BRSCU17 © BMI-BRSCU
  18. 18. INVESTMENT IN BUILDING & CONSTRUCTION: 2011-2020: LMR SOYUZ SCENARIO SECTOR AND SEGMENT 2011-2020 Average PRIVATE RESIDENTIAL R*Million R*Million % % Dwelling-houses < 80 m2 22 036 2 204 1.27% 0.71% Dwelling-houses > 80 m2 137 834 13 783 7.94% 4.44% Townhouses & Flats 84 840 8 484 4.89% 2.73% Other (Incl. hotels & casinos) 8 428 843 0.49% 0.27% Additions & alterations 76 628 7 663 4.41% 2.47% PUBLIC RESIDENTIAL Affordable Housing 205 403 20 540 11.83% 6.61% General Government 52 346 5 235 3.02% 1.69% Public authorities. 306 31 0.02% 0.01% Private Busuness Enterprises 65 102 6 510 3.75% 2.10% TOTAL RESIDENTIAL 652 923 65 292 37.61% 21.02% PRIVATE NON-RESIDENTIAL Offices 36 568 3 657 2.11% 1.18% Shops 41 059 4 106 2.37% 1.32% Industrial & warehouse 51 242 5 124 2.95% 1.65% Other 6 662 666 0.38% 0.21% Additions & Alterations 47 009 4 701 2.71% 1.51% PUBLIC NON-RESIDENTIAL General Government 169 324 16 932 9.75% 5.45% Public Corporations 56 101 5 610 3.23% 1.81% Private Busuness Enterprises 359 797 35 980 TOTAL NON RESIDENTIAL 767 762 76 776 44.23% 24.71% Unrecorded Res Adds and Alts 265 226 26 523 15.28% 8.54% Unrecorded Non Res Adds and Alts 50 092 5 009 2.89% 1.61% GRAND TOTAL 1 736 003 173 600 100.00% 55.88% CONSTRUCTION General 432 067 43 207 31.53% 13.91% government Public 739 856 73 986 53.98% 23.82% corporations Private 198 583 19 858 14.49% 6.39% business TOTAL CONSTRUCTION 1 370 507 137 051 100.00% 44.12% TOTAL BLDNG AND CONSTR 3 106 510 310 651 100.00% 3 years (2010-2012) 931 953 5 years (2010-2014) 1 553 255 10 years (2011-2020) 3 106 51018 © BMI-BRSCU
  19. 19. Table 7.1 Mega-projects under consideration, 2012 – 2020 Project stage R billion Concept Pre- Feasibility Financing Detailed Tender Cons- Ongoing Total feasibility design truction prog- rammes1 Water 20 – – 32 – 5 18 – 74 Transport 310 – 78 17 12 88 8 71 583 Electricity 720 268 314 – 95 103 345 101 1 945 Liquid fuels – – 211 – 2 – – – 213 Education 20 – – 40 – – – 125 185 Health – – 50 29 – – – 31 110 Telecommunication 12 – – – – – 3 – 15 Human settlement – – – 78 – – – – 78 Total 1 082 268 653 195 109 195 374 328 3 204 % total expenditure 33.8% 8.4% 20.4% 6.1% 3.4% 6.1% 11.7% 10.2% 100.0% 1. Ongoing programmes include multiple projects at different stages of development, such as universal access to electricity and school building programme Source: 2012 Budget Review, Chapter 7 (Infrastructure)19 © BMI-BRSCU
  20. 20. Typically the questions were: • Is it NEW money? Yes – budgeted but not on top of. • What is the definition of Construction? • Does it include both Building and Construction? Yes • Does it include the other components of GFCF, ie Machinery and Equipment, Transport Equipment and Transfer Costs? In some cases – Yes. • Where are the Houses being built, how can we find out? Shown in the IMP model.20 © BMI-BRSCU
  21. 21. CURRENT REALITY: BUILDING AND CONSTR 2011* EST Q1 2011 www.strategicforum.co.za CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011* BUILDING INVESTMENT BUILDING & CONSTRUCTION INVESTMENT CONSTRUCTION INVESTMENT R152 465 MILLION R328 843 MILLION R176 378 MILL CONTRACTOR (50,8%) RESIDENTIAL INVESTMENT R66 821 MIO R12 775 MILLION R59 351 LABOUR (40%) R131 537 MIO SUBCONTRACTOR (49,2%) NON RESIDENTIAL INVESTMENT R64 716 MIO R60 951 MILLION UNRECORDED MATERIAL (60%) DIRECT TO USER (40%) ADDITIONS AND ALT’S INVEST** R197 306 MIO R77 483 MILLION R32 163 MILLION LARGE CHAIN BLDRS MERCHANT INDIRECT VIA DISTRIBUTION LARGE IND BUILDERS MERCHANT (25%) (60%) (10%) R49 327 MILLION R118 384 MILLION R19 731 MILLION SPECIALIST SHOP LOCAL HARDWARE STORE HYPERMARKET/SUPERMARKET (5%) (15%) (5%) R9 865 MILLION R29 596 MILLION R9 865 MILLION * ESTIMATED Q4 2011 * 2010 Prices21 ** Residential and Non Residential © BMI-BRSCU
  22. 22. R MILLIONS (CURRENT VALUES)22 2 000 4 000 6 000 8 000 0 10 000 12 000 14 000 1993/01 1993/02 Defining Events 1993/03 1993/04 1994/01 Democratic Election 1994/02 1994/03 1994/04 1995/01 1995/02 1995/03 1995/04 1996/01 Transition to Democracy 1996/02 1996/03 1996/04 1997/01 1997/02 1997/03 1997/04 1998/01 Currency Collapse 1998/02 1998/03 1998/04 1999/01 1999/02 1999/03 1999/04 2000/01 2000/02 2000/03 2000/04 2001/01 2001/02 2001/03 World Trade Centre 2001/04 2002/01 2002/02 2002/03 ON TOP OF DECLINE OF - 4,99% IN 2009 VS 2008 2002/04 2003/01 2003/02 2003/03 2003/04 2004/01 (Source: SARB; BMI-BRSCU Workings) BNG Housing Programme 2004/02 www.strategicforum.co.za 2004/03 2004/04 2005/01 CUM Q4 2011 VS 2010 = R40 140 MIO VS R40 811 MIO = - 9,95% 2005/02 2005/03 2005/04 CUMULATIVE YTD Q ON Q (PREVIOUS YEAR) % CHANGE 2006/01 2006/02 Sub Prime Crisis (NCA) 2006/03 2006/04 GFCF RESIDENTIAL BUILDING: Q1 1993-Q4 2011: CURRENT VALUES 2007/01 2007/02 2007/03 2007/04 2008/01 CUM YTD Q4 2011 VS 2010 = - 1,64% 2008/02 2008/03 GFCF RESIDENTIAL BUILDING: Q1 1993-Q4 2011 2008/04 2009/01 2009/02 2009/03 2009/04 Soccer World Cup 2010/01 2010/02 2010/03 2010/04 2011/01 2011/02 2011/03 2011/04 0% 10% 20% 30% 40% 50% -20% -10% CUM Q/Q (PREVIOUS YEAR) % CHANGE© BMI-BRSCU
  23. 23. GFCF RESIDENTIAL BUILDING: Q1 1993-Q4 2011 www.strategicforum.co.za CUM Q/Q GFCF RESIDENTIAL 2011 VS 2010 (*Q4) (Source: SARB, BMI-BRSCU Workings) 45 000 0.00% 40 000 -1.00% -2.00% 35 000 Cum Q/Q Percentage Change -3.00% 30 000 -4.00% R Millions 25 000 -5.00% 20 000 -6.00% 15 000 -7.00% 10 000 -8.00% 5 000 -9.00% 0 -10.00% Cum Cum Cum Cum GFCF Q1 GFCF Q2 GFCF Q3 GFCF Q4 CUM Q/Q GFCF RESIDENTIAL 2010 10 283 20 685 30 912 40 811 CUM GFCF RESIDENTIAL 2011 9 388 19 425 29 842 40 140 CUM Q/Q % CHANGE 2011 VS 2010 -8.70% -6.09% -3.46% -1.64%23 © BMI-BRSCU
  24. 24. R MILLIONS (CURRENT VALUES)24 2 000 4 000 6 000 8 000 0 10 000 12 000 14 000 16 000 18 000 1993/01 1993/02 1993/03 Defining Events 1993/04 1994/01 Democratic Election 1994/02 1994/03 1994/04 1995/01 1995/02 1995/03 1995/04 1996/01 Transition to Democracy 1996/02 1996/03 1996/04 1997/01 1997/02 1997/03 1997/04 1998/01 Currency Collapse 1998/02 1998/03 1998/04 1999/01 1999/02 1999/03 1999/04 2000/01 2000/02 2000/03 2000/04 2001/01 2001/02 2001/03 World Trade Centre 2001/04 2002/01 2002/02 2002/03 2002/04 2003/01 ON TOP OF GROWTH OF + 0,80% IN 2010 VS 2009 2003/02 2003/03 2003/04 2011 VS 2010 = R60 951 MIO VS R58 747 Mio = + 3,75% 2004/01 BNG Housing Programme 2004/02 www.strategicforum.co.za 2004/03 2004/04 2005/01 2005/02 2005/03 (Source: SARB; BMI-BRSCU Workings) 2005/04 2006/01 2006/02 Sub Prime Crisis 2006/03 2006/04 2007/01 2007/02 2007/03 2007/04 2008/01 2008/02 CUM YTD Q4 2011 VS 2010 = + 3,75% 2008/03 CUMULATIVE YTD Q TO Q (PREVIOUS YEAR) PERCENTAGE CHANGE 2008/04 GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q4 2011: CURRENT VALUES 2009/01 2009/02 GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q4 2011 2009/03 2009/04 Soccer World Cup 2010/01 2010/02 2010/03 2010/04 2011/01 2011/02 2011/03 2011/04 0% 5% -5% 10% 15% 20% 25% 30% 35% 40% -10% CUM YTD Q/Q % CHANGE© BMI-BRSCU
  25. 25. GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q4 2011 www.strategicforum.co.za CUM Q/Q GFCF NON RESIDENTIAL BUILDING 2011 VS 2010 (*Q4) (Source: SARB, BMI-BRSCU Workings) 70 000 4.00% 60 000 3.50% Cum Q/Q Percentage Change 50 000 3.00%R Millions 40 000 2.50% 30 000 2.00% 20 000 1.50% 10 000 0 1.00% 2011/01 2011/02 2011/03 2011/04 CUM Q/Q GFCF NON RES BUILDING 2010 14 935 29 646 44 028 58 747 CUM GFCF NON RES BUILDING 2011 15 171 30 266 45 209 60 951 CUM Q/Q % CHANGE 2011 VS 2010 1.58% 2.09% 2.68% 3.75%25 © BMI-BRSCU
  26. 26. 26 R Millions (Current Value) 0 5 000 10 000 15 000 20 000 25 000 30 000 1993/01 1993/02 1993/03 Defining events 1993/04 1994/01 Democratic Election 1994/02 1994/03 1994/04 1995/01 1995/02 1995/03 1995/04 1996/01 Transition to Democracy 1996/02 1996/03 1996/04 1997/01 1997/02 1997/03 1997/04 1998/01 Currency Collapse 1998/02 1998/03 1998/04 1999/01 1999/02 1999/03 1999/04 2000/01 2000/02 2000/03 2000/04 2001/01 2001/02 2001/03 World Trade Centre 2001/04 2002/01 2002/02 2002/03 2002/04 Axis Title 2003/01 2003/02 2003/03 2003/04 ON TOP OF DECLINE OF - 3,90% IN 2010 VS 2009 2004/01 BNG Housing Programme 2004/02 www.strategicforum.co.za 2004/03 2011 VS 2010 = R101 091 MIO VS R99 558 MIO = + 1,54% 2004/04 2005/01 (Source: SARB; BMI-BRSCU Workings) 2005/02 2005/03 2005/04 2006/01 2006/02 Sub Prime Crisis (NCA) Cumulative YTD Q/Q (Previous Year) % Change 2006/03 2006/04 2007/01 2007/02 2007/03 CUM YTD Q4 2011 VS 2010 = + 1,54% 2007/04 GFCF TOTAL BUILDING: Q1 1993-Q4 2011 2008/01 2008/02 GFCF Total Building by Quarter: Q1 1993 - Q4 2011: Current Values 2008/03 2008/04 2009/01 2009/02 2009/03 2009/04 Soccer World Cup 2010/01 2010/02 2010/03 2010/04 2011/01 2011/02 2011/03 2011/04 0% 5% -5% 10% 15% 20% 25% 30% 35% -10% Cum YTD Q/Q Percentage Change© BMI-BRSCU
  27. 27. GFCF TOTAL BUILDING: Q1 1993-Q4 2011 www.strategicforum.co.za CUM Q/Q GFCF TOTAL BUILDING 2011 VS 2010 (*Q4) (Source: SARB, BMI-BRSCU Workings) 120 000 2.00% 100 000 1.00% Cum Q/Q Percentage Change 80 000 0.00%R Millions 60 000 -1.00% 40 000 -2.00% 20 000 0 -3.00% Cum Cum Cum Cum GFCF Q1 GFCF Q2 GFCF Q3 GFCF Q4 CUM Q/Q GFCF TOTAL BUILDING 2010 25 218 50 331 74 940 99 558 CUM GFCF TOTAL BUILDING 2011 24 559 49 691 75 051 101 091 CUM Q/Q % CHANGE 2011 VS 2010 -2.61% -1.27% 0.15% 1.54%27 © BMI-BRSCU
  28. 28. CUM YTD % CHANGE: TOTAL BPP & BC: 1994-2012 (JAN) www.strategicforum.co.za Cum Y/Y % Ch: BPP and BC: Total Building (Incl A&A): 1993-2012: R*1000 (Current Values) (JAN) (Source: StatsSA; BMI-BRSCU: BC Total RSA by Month and Type of Building1993-2008: % CUM BC BY SEGM & MNTH: Chart 15(2)) 60% 55% Total BC turned at about – 50% 45% 21% and move to positive 40% growth by third quarter 2011 35% 30% ... 25% 20% 15% 10% 5% 0% -5%-10%-15%-20%-25%-30%-35%-40% Total BPP has turned at -35%-45%-50% and has breached zero in first quarter 2011 . . . 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 % CUM BC BY SEGM& MNTH % CUM BPP BY SEGM& MNTH 12 per. Mov. Avg. (% CUM BC BY SEGM& MNTH) 12 per. Mov. Avg. (% CUM BPP BY SEGM& MNTH)28 © BMI-BRSCU
  29. 29. NET BUILDING IN THE PIPELINE: 1993-2012 (JAN) www.strategicforum.co.za Total Building: BC: 1993-2012: Net Building in the Pipeline (NBIP): by Month: R*1000 (Current Values) (JAN) (Source: StatsSA, BMI-BRSCU: BC Total RSA by Month and Type of Building1993-2008: NBIP (BPP-BC): Chart 16)6 000 000 Total BC Trend-break5 000 000 occurred in mid 2006.4 000 0003 000 0002 000 0001 000 000 0-1 000 000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Recovery is on the way. Total Building NBIP (BPP-BC) Total Building BC 12 per. Mov. Avg. (Total Building NBIP (BPP-BC)) 12 per. Mov. Avg. (Total Building BC)29 © BMI-BRSCU
  30. 30. RES & NR TOTAL BC: CUM ACTUAL 2011 VS 2010: R MIO www.strategicforum.co.za RES & NON RES TOTAL (INCL A&A): BC: CUM ACTUAL 2011 VERSUS 2010 BY MONTH: TOTAL RSA (Source: StatsSA, BMI-BRSCU Workings) 11 000 000 2% 10 000 000 1% Percentage Difference: Cum Actual 2011 vs 2010 9 000 000 0% -1% 8 000 000 Square Metres (m2) -2% 7 000 000 -3% 6 000 000 -4% 5 000 000 -5% 4 000 000 -6% 3 000 000 -7% 2 000 000 -8% 1 000 000 -9% 0 -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Res & NR Total: Cum Actual 2011: m2 525 633 1 282 340 2 239 897 2 953 942 3 707 281 4 602 871 5 372 891 6 033 699 6 849 005 7 681 415 8 562 469 9 278 498 Res & NR Total: Cum Actual 2010: m2 640 465 1 387 581 2 272 261 3 053 065 4 093 789 4 851 073 5 923 437 6 773 354 7 493 079 8 390 558 9 282 724 10 030 653 Res & NR Total: Cum Actual 2011 vs 2010 (%) -5.82% -1.99% 1.99% -0.71% -7.55% -3.52% -7.98% -9.77% -7.56% -7.53% -6.92% -6.73%30 © BMI-BRSCU
  31. 31. % DIFFERENCE IN CUM Y/Y BC : ACTUAL 2011 VS 2010: www.strategicforum.co.za % Difference in Cumulative Y/Y BC: Actual 2011 vs 2010 by Segment: Total RSA (Source: StatsSA, BMI-BRSCU Workings) 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% R000 R000 R000 R000 R000 R000 R000 R000 R000 R000 R000 R000 R000 R000 No m2 No m2 No m2 m2 m2 m2 m2 m2 m2 m2 Dwellings < Dwellings > Flats and TH Other Total Office & Shopping Ind&WH Other Total A&A A&A Other Total A&A 80m2 80m2 Banking Dwellings Total31 © BMI-BRSCU
  32. 32. CURRENT REALITY OF INVESTMENT IN BUILDING BY SECTOR AND SEGMENT: 2010 INVESTMENT IN BUILDING BY SECTOR AND BY SEGMENT: 2011: M2*1000 (TOTAL = 41 084 M2*1000) (Source: SARB, StatsSA, MFA, BMI-BRSCU Workings) PRIVATE RESIDENTIAL 0 Dwelling-houses < 80 m2 868 Dwelling-houses > 80 m2 2 888 Townhouses & Flats 1 323 Other (Incl. hotels & casinos) 192 Additions & alterations 1 777 PUBLIC RESIDENTIAL Affordable Housing 9 547 General Government 1 781 Public corporations 10 Private Business Enterprises 2 596 TOTAL RESIDENTIAL 20 981 PRIVATE NON-RESIDENTIAL Offices 498 Shops 558 Industrial & warehouse 974 Other 190 Additions & Alterations 758 PUBLIC NON-RESIDENTIAL General Government 2 450 Public corporations 756 Private Business Enterprises 6 081 TOTAL NON RESIDENTIAL 12 266 Unrecorded Res Adds and Alts 6 851 986 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000 12 000 13 000 14 000 15 000 16 000 17 000 18 000 19 000 20 000 21 000 22 000 23 000 032 © BMI-BRSCU
  33. 33. Cubic Metres33 - 100 000 120 000 20 000 40 000 60 000 80 000 Jan 01 Apr 01 Jul 01 Oct 01 Jan 02 Apr 02 Jul 02 Oct 02 Jan 03 Apr 03 Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05 Jul 05 Oct 05 Local Building Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 2001 – 2012 (FEB) Jul 07 Oct 07 Jan 08 Apr 08 (Source: Crickmay & Associates, BMI-BRSCU Workings) Jul 08 12 per. Mov. Avg. (Local Building) Oct 08 Jan 09 Lumber Sales by End-use: Local Building: January 2001 - Jan 2012 (m3) Apr 09 THE LOCAL BUILDING LUMBER MARKET: Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11© BMI-BRSCU Jan 12
  34. 34. LOCAL BUILDING LUMBER SALES VS TOTAL BC: 2002 – 2012 (FEB) Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BC (m2): January 2002 - Jan 2012 (Source: StatsSA; Crickmay Associates, BMI-BRSCU Workings)70%50%30%10%-10%-30%-50% Jan 02 Mar 02 May 02 Jul 02 Nov 02 Jan 03 Mar 03 May 03 Jul 03 Nov 03 Jan 04 Mar 04 May 04 Jul 04 Nov 04 Jan 05 Mar 05 May 05 Jul 05 Nov 05 Jan 06 Mar 06 May 06 Jul 06 Nov 06 Jan 07 Mar 07 May 07 Jul 07 Nov 07 Jan 08 Mar 08 May 08 Jul 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Nov 09 Jan 10 Mar 10 May 10 Jul 10 Nov 10 Jan 11 Mar 11 May 11 Jul 11 Nov 11 Jan 12 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total BC (m2) 12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total BC (m2))34 © BMI-BRSCU
  35. 35. LOCAL BUILDING LUMBER SALES VS TOTAL BPP: 2002 – 2012 (FEB) Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BPP (m2) : January 2002 - January 2012 (Source: Crickmay Associates, BMI-BRSCU Workings)70%50% Local Building Lumber Sales appear to be more closely correlated to Total BPP than to BC and also leads the revival?30%10%-10%-30%-50% May 02 Jul 02 May 03 Jul 03 May 04 Jul 04 May 05 Jul 05 May 06 Jul 06 May 07 Jul 07 May 08 Jul 08 May 09 Jul 09 May 10 Jul 10 May 11 Jul 11 Jan 02 Mar 02 Sep 02 Nov 02 Jan 03 Mar 03 Sep 03 Nov 03 Jan 04 Mar 04 Sep 04 Nov 04 Jan 05 Mar 05 Sep 05 Nov 05 Jan 06 Mar 06 Sep 06 Nov 06 Jan 07 Mar 07 Sep 07 Nov 07 Jan 08 Mar 08 Sep 08 Nov 08 Jan 09 Mar 09 Sep 09 Nov 09 Jan 10 Mar 10 Sep 10 Nov 10 Jan 11 Mar 11 Sep 11 Nov 11 Jan 12 Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total BPP (m2) 12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total BPP (m2))35 © BMI-BRSCU
  36. 36. LOCAL BUILDING LUMBER SALES: CUM Y/Y 2011 VS 2010 (DECEMBER) Lumber Sales by End-use: Local Building: Cum Y/Y 2011 vs 2010 (Source: Crickmay & Associates, BMI-BRSCU Workings) 1 200 000 40% % Change Cum Y/Y Local Building: 2010 vs 2009 35% 1 000 000 30% 800 000 25% Cubic Metres 600 000 20% 15% 400 000 10% 200 000 5% - 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Cum Y/Y Local Building 62 111 145 62 226 32 306 35 389 02 464 88 542 71 636 69 712 76 807 35 908 24 968 52 2011 Cum Y/Y Local Building 83 590 174 20 265 67 345 74 437 89 537 28 628 33 729 73 837 35 933 83 1 036 1 109 % Change Cum Y/Y Local Building: 2011 vs 2010- 34.58% 19.62% 17.38% 12.86% 12.56% 15.57% 15.78% 14.61% 17.48% 15.67% 14.10% 14.60%36 © BMI-BRSCU
  37. 37. LOCAL BUILDING LUMBER SALES: CUM Y/Y 2012 VS 2011 (FEB) Lumber Sales by End-use: Local Building: Cum Y/Y Jan 2012 vs 2011 (Source: Crickmay & Associates, BMI-BRSCU Workings) 1 200 000 0% MAT FORECAST % Change Cum Y/Y Local Building: 2012 vs 2011 -1% 1 000 000 -1% 800 000 -2% Cubic Metres -2% 600 000 -3% 400 000 -3% -4% 200 000 -4% - -5% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 Cum Y/Y Local Building 83 590 174 204 265 674 345 749 437 896 537 281 628 339 729 731 837 356 933 839 1 036 3 1 109 9 2012 Cum Y/Y Local Building 80 164 170 778 262 248 342 323 434 470 533 855 624 913 726 305 833 930 930 413 1 032 9 1 106 5 % Change Cum Y/Y Local Building: 2012 vs 2011 -4.10% -1.97% -1.29% -0.99% -0.78% -0.64% -0.55% -0.47% -0.41% -0.37% -0.33% -0.31%37 © BMI-BRSCU

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