The Building Confidence Index, published by financial services firm FNB and research organisation the Bureau for Economic Research (BER), remained relatively stable in the first quarter of the year, decreasing by one point quarter-on-quarter to 42 index points.

Quarter-on-quarter, the confidence expressed by building main contractors increased by 11 points, that of quantity surveyors by seven points and subcontractors' confidence increased by five points.

However, confidence among architects declined by two points, the confidence among manufacturers of building materials was down by 13 points and hardware retailers' confidence sank by 14 points.

Overall, the construction sector likely contributed to growth in the first quarter of the year, but only marginally. Further, while this recovery should be maintained over the short term, the pace will be constrained, says FNB senior economist Koketso Mano.

Further, excluding building material manufacturer and hardware retailer confidence, sentiment of the core building sector ticked up to its best level since 2023, which correlates with a broad improvement in work.

“There are still some key areas of concern, however. The results this quarter once again reveal the extent of strain on residential builders. Activity and profitability softened and order books remained relatively weak,” she points out.

“Despite the interest rate cuts over the past year and a half, the recovery in demand for residential buildings is yet to mature, despite other interest-rate-sensitive sectors in the economy, such as vehicle sales, doing well,” Mano adds.

This quarterly reading indicates that almost 60% of respondents across the building sector value chain are dissatisfied with prevailing business conditions. Sentiment during the quarter edged lower despite a broad improvement in activity and overall profitability.

The important exceptions, however, were residential builders and building material manufacturers, she says.

“The non-residential building recovery is on track, although still off a low base, and is underpinned largely by additions and alterations. In contrast, new developments, especially in the residential building sector, are still relatively elusive,” Mano adds.

However, the results are more upbeat in the non-residential sector, where confidence jumped to its best level in 18 years, largely owing to a sharp uptick in work among building subcontractors, such as painters and electricians.

“This continued improvement in non-residential building activity is in step with the somewhat better property dynamics.

“For example, vacancy rates in the office market are easing, and this is often paired with retrofitting and renovating of existing space to accommodate new tenant preferences.

“Simultaneously, there is evidence of investment by shopping centres to provide their own electricity and water. These instances highlight some of the demand drivers within the non-residential building sector currently,” Mano points out.

Additionally, the average activity among architects registered a notable increase in the first quarter of the year, which suggests that the trend of better building activity will likely continue over the next few months.

Similarly, activity among quantity surveyors improved, although the level was still below the long-term average for the series. In terms of confidence, a reading of 42 was recorded for architects, while quantity surveyors recorded a reading of 43 in the first quarter.

However, after increasing to 57 in the fourth quarter of 2025, the business confidence of hardware retailers fell by 14 points to 43 in the first quarter of the year.

The lower sentiment was at odds with the underlying data, which remained quite buoyant, especially sales, and expectations for next quarter are also upbeat.

Meanwhile, weaker domestic and export sales and lower productivity weighed on the sentiment of building material manufacturers, Mano says.