Long Term Forecasts 1946 - 2020 Based on SARB Investment Data Dr Johan Snyman
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Long Term Forecasts 1946 - 2020 Based on SARB Investment Data Dr Johan Snyman Medium-Term Forecasting Associates STELLENBOSCH 2 April 2013 MEDIUM-TERM FORECASTING ASSOCIATES Building Economists Tel: (021) 881-3887 PO Box 7119 Fax: (021) 881-3887 STELLENBOSCH, 7599 E-mail: [email protected]
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MEDIUM-TERM FORECASTING ASSOCIATES Building EconomistsTel: (021) 881-3887 PO Box 7119Fax: (021) 881-3887 STELLENBOSCH, 7599 E-mail: [email protected]. Long Term Forecasts 1946 - 2020 Based on SARB Investment Data Dr Johan Snyman Medium-Term Forecasting Associates STELLENBOSCH - PowerPoint PPT Presentation
Transcript of Long Term Forecasts 1946 - 2020 Based on SARB Investment Data Dr Johan Snyman
Long Term Forecasts 1946 - 2020
Based on SARB Investment Data
Dr Johan Snyman
Medium-Term Forecasting Associates
STELLENBOSCH
2 April 2013
MEDIUM-TERM FORECASTING ASSOCIATESBuilding Economists Tel: (021) 881-3887 PO Box 7119 Fax: (021) 881-3887STELLENBOSCH, 7599 E-mail: [email protected]
Introduction
The South African Reserve Bank has released their first estimates of data of Gross Fixed Capital Formation (aka Investment). Now that we have the 2012 investment figures, we need to revise our earlier forecasts because the base from which we forecast has changed. These revised forecasts are based on the following considerations:
Interest rates are expected to stay low in 2013/14, but are expected to rise in 2015. This could have negative knock-on effects on building demand levels during 2016/17
Income levels are expected to keep pace with general inflation – a positive
Consumers’ debt levels are still high – a negative for residential demand
The economic growth rate is expected to accelerate in 2014/15 and slow down in 2016/17. This will impact on the non-residential sector
Construction works (CW) is expected to drop in coming years from an historic high point because of the completion of several mega-projects (Gautrain, Fifa stadiums, three new airports, many roadbuilding projects), already included in peak figures
Nevertheless, CW demand could still be three times the 2000 level and could recover from 2016 because of continued public infrastructural spending
GROSS DOMESTIC PRODUCT AT CONSTANT 2012 PRICES
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
Compound Long Term Growth 3.2% p.a.
GROSS DOMESTIC FIXED INVESTMENT AT CONSTANT 2012 PRICES
0
200
400
600
800
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
LONG TERMGROWTH3.6% pa
COMPARISON GDP & GDFI AT CONSTANT 2012 PRICES ANNUAL PERCENTAGE CHANGES
-30
0
30
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE (ECONOMIC UPSWINGS SHADED)
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
GDFI APC GDP APC
GROSS FIXED CAPITAL FORMATION AS PERCENTAGE OF GDP
0
5
10
15
20
25
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
PE
RC
EN
TA
GE
SISHEN-SALDANHARICHARDSBAY HARBOUR
ESKOMPOWERSTATIONSSASOLSII & III
SHARPE-VILLE
MOSS-GAS
TELKOM
STADIUMSESKOMTRANSNETGAUTRAINAIRPORTSROADS
INVESTMENT IS THE ENGINE OF GROWTH ...
TOTAL INVESTMENT IN BUILDINGS 1946 - 2020 AT CONSTANT 2012 PRICES
0
20
40
60
80
100
120
140
160
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
LONG-TERM GROWTH RATE2.2 % p.a.
INVESTMENT IN TOTAL HOUSING 1946 - 2020 AT CONSTANT 2012 PRICES
0
10
20
30
40
50
60
70
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
LONG TERMGROWTH 2 % p.a.
4th KUZNETS CYCLE
1st
2nd 3rd
PRIVATE & PUBLIC HOUSING, 1946 - 2020 AT CONSTANT 2012 PRICES
0
10000
20000
30000
40000
50000
60000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N
PRIVATE PUBLIC
INVESTMENT IN TOTAL NON-RESIDENTIAL BUILDINGS 1946 - 2020 AT CONSTANT 2012 PRICES
0
10
20
30
40
50
60
70
80
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
LONG TERMGROWTH2.6% pa
INVESTMENT IN PRIVATE & PUBLIC NON-RESIDENTIAL BUILDINGS 1946 - 2020AT CONSTANT 2012 PRICES
0
10000
20000
30000
40000
50000
60000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
PRIVATE PUBLIC
TOTAL INVESTMENT IN CONSTRUCTION WORKS 1946 - 2020 AT CONSTANT 2012 PRICES
0
20
40
60
80
100
120
140
160
180
200
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
SOURCE: SARB, MFA DATABASE
RA
ND
BIL
LIO
N
SISHEN-SALDANHARICHARDS BAY MINESROADS
MOSSGAS
TELKOMALUSAFCOLUMBUSOLIFANTSVLEIFAURE
SASOL II & IIIESKOMPOWERSTATIONSSAFARI
LARGE DAMS
COEGA
FREE STATEGOLDFIELDS
LONG TERMGROWTH2.6% p.a.
STADIUMS AIRPORTS GTRAIN ESKOM ROADS
INVESTMENT IN CONSTRUCTION WORKS: PUBLIC AUTHORITIES AT CONSTANT 2012 PRICES
0
10000
20000
30000
40000
50000
60000
70000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
AN
NU
M
Compound Long TermGrowth Rate 1.5% p.a. (with massive structural swings)
INVESTMENT IN CONSTRUCTION WORKS: PUBLIC CORPORATIONS AT CONSTANT 2012 PRICES
0
20000
40000
60000
80000
100000
120000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source:SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
AN
NU
M
Compound Long Term Growth Rate 7% p.a.
CONSTRUCTION WORKS TOTAL PUBLIC SECTOR AT CONSTANT 2012 PRICES
0
20000
40000
60000
80000
100000
120000
140000
160000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
AN
NU
M
Compound Long Term Growth Rate 2.9% p.a. (with massivestructural swings)
CONSTRUCTION WORKS TOTAL PRIVATE SECTOR AT CONSTANT 2012 PRICES
0
5000
10000
15000
20000
25000
30000
35000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source:SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
AN
NU
M
Compound Long Term Growth Rate 1.9% p.a.
Construction Works Comparison: Public Authorities; Public Corporations; Private 1946 to 2020 AT CONSTANT 2012 PRICES
0
20000
40000
60000
80000
100000
120000
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
Ra
nd
Mil
lio
n P
er
An
nu
m
P A P C Private Sector
TOTAL PUBLIC INVESTMENT IN BUILDING & CONSTRUCTION AT CONSTANT 2012 PRICES
0
20
40
60
80
100
120
140
160
180
200
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SA RESERVE BANK; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
AN
NU
M
DECLINE 1975 - 1995 = 67%
RISE1995 - 2012= 530%
TOTAL PRIVATE BUILDING & CONSTRUCTION INVESTMENT AT CONSTANT 2012 PRICES
0
20
40
60
80
100
120
140
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
AN
NU
M
LONG-TERM GROWTH2.3% p.a.
TOTAL INVESTMENT IN BUILDINGS & CONSTRUCTION WORKS RAND BILLION AT CONSTANT 2012 PRICES
0
50
100
150
200
250
300
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Source: SARB; MFA DATABASE
RA
ND
BIL
LIO
N A
T C
ON
ST
AN
T 2
01
0 P
RIC
ES
LONG-TERM GROWTH2.4% p.a.
TOTAL BLDG & CW: COMPARISON of SIZE of PUBLIC & PRIVATE SECTOR AT CONSTANT 2012 PRICES RAND BILLION
0
20
40
60
80
100
120
140
160
180
200
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Sourece: SARB; MFA DATABASE
RA
ND
BIL
LIO
N
PUBLIC PRIVATE
PRIVATE SECTOR as PERCENTAGE of TOTAL SECTOR
0
10
20
30
40
50
60
70
80
90
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
Source: SARB; MFA DATABASE
PE
RC
EN
TA
GE
PRIVATE BUILDING PRIVATE CW
PRIVATE BUILDING SECTOR as PERCENTAGE of TOTAL BUILDING SECTOR (average 72%)
PRIVATE CONSTRUCTION WORKS SECTOR asPERCENTAGE of TOTAL C W (average 23%)
