Making sense in the digital age: March 2012

1 © BMI-BRSCU© BMI-BRSCU

Towards

Making sense of the Building-, Construction- and Property-Industry:

SENSEMAKING IN THE DIGITAL AGEDr. Llewellyn B. Lewis

MARCH 2012

THE STRATEGIC FORUMA place of assembly

for strategic conversations

THE STRATEGIC FORUMwww.strategicforum.co.za

BMI

Studium Ad Prosperandum

Voluntas in Conveniendum

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KNOWN AND UNKNOWNwww.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.

3

What we don’t know we don’t know

What we know we 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.

All our knowledge is about the past, but all our decisions are about the future.

KNOWN AND UNKNOWNwww.strategicforum.co.za


GFCFR521,6 BILLION(22% OF GDP)

BUILDING INV.R108,5* BILLION(20,8% OF GFCF)

CONSTR. INV.R174,9 BILLION(33,5% OF GDFI)

GDPR2663 BILLION

GOVERNMENT BUDGETR798,9 BILLION(30% OF GDP)

TRANSFER DUTYR8- R9 BILLION PA

FTHB SUBSIDIES(1,9% OF BUDGET = R13,8 BILLION)

(500 000 HOUSING UNITS)INVESTMENT IN AFFORDABLE HOUSING

(R1,4 TRILLION 2010-2020)

RESIDENTIAL AND NON RES BPP AND

BUILDINGS COMPLETED (BC)

PRIMARY AND SECONDARY PROPERTY MARKET

R267 BILLION PA MORTGAGE ADVANCES PA

R1000 BIO MORTGAGES O/S

LISTED PROPERTY SECTOR MARKET CAPITALISATION

> R100 BILLION

ANNUAL HOUSINGNEED

(POP. GROWTH ONLY)250 000

INTEGRATED HOUSING

EMPLOYMENTIN BUILDING & CONSTRUCTION

> 1 000 000 PEOPLE

* When the UNRECORDED Home Improvement and Affordable Housing is taken into

account Building Investment = 30,5% of GFCF

PROPERTY OWNERSHIPENGINE FOR GROWTH

AND WEALTH CREATIONR3,8 TRILLION RES PROPERTY

R1,3 TRILLION NON RES PROPERTY

URBAN HOUSINGBACKLOG > 1,5 MILLION

UNITS IN 2010

GOVERNMENT INFRASTRUCTURE SPEND (R846 BILLION 2010-2020)

www.strategicforum.co.za


GFCFR521,6 BILLION(22% OF GDP)

BUILDING INV.R108,5* BILLION(20,8% OF GFCF)

CONSTR. INV.R174,9 BILLION(33,5% OF GDFI)

GDPR2663 BILLION

GOVERNMENT BUDGETR798,9 BILLION(30% OF GDP)

TRANSFER DUTYR8- R9 BILLION PA

FTHB SUBSIDIES(1,9% OF BUDGET = R13,8 BILLION)

(500 000 HOUSING UNITS)INVESTMENT IN AFFORDABLE HOUSING

(R1,4 TRILLION 2010-2020)

RESIDENTIAL AND NON RES BPP AND

BUILDINGS COMPLETED (BC)

PRIMARY AND SECONDARY PROPERTY MARKET

R267 BILLION PA MORTGAGE ADVANCES PA

R1000 BIO MORTGAGES O/S

LISTED PROPERTY SECTOR MARKET CAPITALISATION

> R100 BILLION

ANNUAL HOUSINGNEED

(POP. GROWTH ONLY)250 000

INTEGRATED HOUSING

EMPLOYMENTIN BUILDING & CONSTRUCTION

> 1 000 000 PEOPLE

* When the UNRECORDED Home Improvement and Affordable Housing is taken into

account Building Investment = 30,5% of GFCF

PROPERTY OWNERSHIPENGINE FOR GROWTH

AND WEALTH CREATIONR3,8 TRILLION RES PROPERTY

R1,3 TRILLION NON RES PROPERTY

URBAN HOUSINGBACKLOG > 1,5 MILLION

UNITS IN 2010

GOVERNMENT INFRASTRUCTURE SPEND (R846 BILLION 2010-2020)


It is estimated that for every R1 spent on infrastructure, R1.40 is added to a country’s gross domestic product.PPP’s are the ideal vehicle for funding the gaps in infrastructure in Africa. (Deloittes research, May 2011)

“Unless the Housing Market

recovers, the Economy will

not recover.” (Warren Buffet, CNN,

4 October 2011)

The UK Government plan to promote building. “It clearly has

recognised the need to boost house building, both to address

the housing crisis and to create jobs.” (Business Day, 22 November 2011)


BUILDING & CONSTRUCTION INVESTMENT

R322 847 MILLIONBUILDING INVESTMENT

R151 341 MILLION

CONSTRUCTION INVESTMENT

R171 506 MILL

CONTRACTOR (50,8%)

R65 602 MIO

SUBCONTRACTOR (49,2%)SUBCONTRACTOR (49,2%)

R63 536 MIO

LABOUR (40%)

R129 138 MIO

DIRECT TO USER (40%)

R77 483 MILLIONMATERIAL (60%)

R193 708 MIO

INDIRECT VIA DISTRIBUTION

(60%)

R116 225 MILLION

LARGE IND BUILDERS MERCHANT

(10%)

R19 371 MILLION

LARGE CHAIN BLDRS MERCHANT

(25%)

R48 427 MILLION

HYPERMARKET/SUPERMARKET

(5%)

R9 685 MILLION

SPECIALIST SHOP

(5%)

R9 685 MILLION

LOCAL HARDWARE STORE

(15%)

R29 056 MILLION

RESIDENTIAL INVESTMENT

R12 775 MILLION

NON RESIDENTIAL INVESTMENT

R60 228 MILLION

UNRECORDED

ADDITIONS AND ALT’S INVEST**

R32 163 MILLION

* 2010 Prices

** Residential and Non Residential


R58 951 MILLION

CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*

CURRENT REALITY: BUILDING AND CONSTR 2011* EST Q1 2011www.strategicforum.co.za

* ESTIMATED Q1 2011

7 © BMI-BRSCU

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 analysethe 8 000 projects within the Department of Human Settlements.

� To maximise employment opportunities by correct retro-fitting of existing buildings; maximisereduction of carbon emissions, and pursue green best practice approaches for engineering services in line with” green building”. (February 2011)

?

STRATEGIC RESPONSEwww.strategicforum.co.za

8 © BMI-BRSCU

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)

?

Asking the right questions.

Turning known unknownsinto known knowns.

First step towards developing

a Vision for the Industry?

Towards developing a Co-operative mindset and cross boundary networking for the Industry?

STRATEGIC RESPONSEwww.strategicforum.co.za

9 © BMI-BRSCU

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?

10

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 issuesMr 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.

Infrastructure Inputs Monitoring Project (IIMP)28 September 2011

11

12

13

The DBSA Infrastructure monitoring model

14 © BMI-BRSCU

15 © BMI-BRSCU

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

Housing 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 972615Source: DBSA IIMP Infrastructure research, 2012



17

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 ADD'S & ALT'S 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

55 153 -10.00% 55 153 55 605 0.82%

94 442 -12.50% 94 442 95 216 0.82%

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-BRSCU

General government

Public corporations

Private Business Enterprises

SHORTTERM OUTLOOK FOR THE BUILDING & CONSTR INDUSTRY: 2011: R*MILLION (CURRENT VALUE)

© BMI-BRSCU

18

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%


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%


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 Add's and Alt's 265 226 26 523 15.28% 8.54%

Unrecorded Non Res Add's and Alt's 50 092 5 009 2.89% 1.61%

GRAND TOTAL 1 736 003 173 600 100.00% 55.88%

CONSTRUCTION

General

government

432 067 43 207 31.53% 13.91%

Public

corporations

739 856 73 986 53.98% 23.82%

Private

business

198 583 19 858 14.49% 6.39%

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) 3 106 510

INVESTMENT IN BUILDING & CONSTRUCTION: 2011-2020: LMR SOYUZ SCENARIO

SECTOR AND SEGMENT

© BMI-BRSCU© BMI-BRSCU

19 © BMI-BRSCU

R billion Concept Pre-

feasibility

Feasibility Financing Detailed

design

Tender Cons-

truction

Ongoing

prog-

rammes1

Total

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

Project stage

Table 7.1 Mega-projects under consideration, 2012 – 2020

Source: 2012 Budget Review, Chapter 7 (Infrastructure)

20 © BMI-BRSCU

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.


BUILDING & CONSTRUCTION INVESTMENT

R328 843 MILLIONBUILDING INVESTMENT

R152 465 MILLION

CONSTRUCTION INVESTMENT

R176 378 MILL

CONTRACTOR (50,8%)

R66 821 MIO

SUBCONTRACTOR (49,2%)SUBCONTRACTOR (49,2%)

R64 716 MIO

LABOUR (40%)

R131 537 MIO

DIRECT TO USER (40%)

R77 483 MILLIONMATERIAL (60%)

R197 306 MIO

INDIRECT VIA DISTRIBUTION

(60%)

R118 384 MILLION

LARGE IND BUILDERS MERCHANT

(10%)

R19 731 MILLION

LARGE CHAIN BLDRS MERCHANT

(25%)

R49 327 MILLION

HYPERMARKET/SUPERMARKET

(5%)

R9 865 MILLION

SPECIALIST SHOP

(5%)

R9 865 MILLION

LOCAL HARDWARE STORE

(15%)

R29 596 MILLION


R12 775 MILLION

NON RESIDENTIAL INVESTMENT

R60 951 MILLION

UNRECORDED

ADDITIONS AND ALT’S INVEST**

R32 163 MILLION

* 2010 Prices

** Residential and Non Residential


R59 351 MILLION

CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011*

CURRENT REALITY: BUILDING AND CONSTR 2011* EST Q1 2011www.strategicforum.co.za

* ESTIMATED Q4 2011

22

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GFCF RESIDENTIAL BUILDING: Q1 1993-Q4 2011: CURRENT VALUESCUMULATIVE YTD Q ON Q (PREVIOUS YEAR) % CHANGE

(Source: SARB; BMI-BRSCU Workings)

CUM YTD Q4 2011 VS 2010 = - 1,64%

CUM Q4 2011 VS 2010 = R40 140 MIO VS R40 811 MIO = - 9,95%ON TOP OF DECLINE OF - 4,99% IN 2009 VS 2008


GFCF RESIDENTIAL BUILDING: Q1 1993-Q4 2011www.strategicforum.co.za


GFCF RESIDENTIAL BUILDING: Q1 1993-Q4 2011www.strategicforum.co.za

CumGFCF Q1

CumGFCF Q2

CumGFCF Q3

CumGFCF 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%

-10.00%

-9.00%

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sCUM Q/Q GFCF RESIDENTIAL 2011 VS 2010 (*Q4)

(Source: SARB, BMI-BRSCU Workings)

24

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GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q4 2011: CURRENT VALUESCUMULATIVE YTD Q TO Q (PREVIOUS YEAR) PERCENTAGE CHANGE


CUM YTD Q4 2011 VS 2010 = + 3,75%

2011 VS 2010 = R60 951 MIO VS R58 747 Mio = + 3,75%ON TOP OF GROWTH OF + 0,80% IN 2010 VS 2009


GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q4 2011www.strategicforum.co.za


GFCF NON RESIDENTIAL BUILDING: Q1 1993-Q4 2011www.strategicforum.co.za

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%

1.00%

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CUM Q/Q GFCF NON RESIDENTIAL BUILDING 2011 VS 2010 (*Q4)(Source: SARB, BMI-BRSCU Workings)

26

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World

Tra

de C

entr

e

BN

G H

ou

sin

g P

rog

ram

me

Sub P

rim

e C

risis

(N

CA

)

Socce

r W

orld C

up

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

5 000

10 000

15 000

20 000

25 000

30 000

1993/0

11993/0

21993/0

31993/0

41994/0

11994/0

21994/0

31994/0

41995/0

11995/0

21995/0

31995/0

41996/0

11996/0

21996/0

31996/0

41997/0

11997/0

21997/0

31997/0

41998/0

11998/0

21998/0

31998/0

41999/0

11999/0

21999/0

31999/0

42000/0

12000/0

22000/0

32000/0

42001/0

12001/0

22001/0

32001/0

42002/0

12002/0

22002/0

32002/0

42003/0

12003/0

22003/0

32003/0

42004/0

12004/0

22004/0

32004/0

42005/0

12005/0

22005/0

32005/0

42006/0

12006/0

22006/0

32006/0

42007/0

12007/0

22007/0

32007/0

42008/0

12008/0

22008/0

32008/0

42009/0

12009/0

22009/0

32009/0

42010/'0

12010/'0

22010/'0

32010/'0

42011/'0

12011/'0

22011/'0

32011/'0

4

Defining events

Cu

m Y

TD

Q/Q

Pe

rce

nta

ge

Ch

an

ge

R M

illi

on

s (

Cu

rre

nt

Va

lue

)

Axis Title

GFCF Total Building by Quarter: Q1 1993 - Q4 2011: Current ValuesCumulative YTD Q/Q (Previous Year) % Change


CUM YTD Q4 2011 VS 2010 = + 1,54%

2011 VS 2010 = R101 091 MIO VS R99 558 MIO = + 1,54%ON TOP OF DECLINE OF - 3,90% IN 2010 VS 2009


GFCF TOTAL BUILDING: Q1 1993-Q4 2011www.strategicforum.co.za


GFCF TOTAL BUILDING: Q1 1993-Q4 2011www.strategicforum.co.za

CumGFCF Q1

CumGFCF Q2

CumGFCF Q3

CumGFCF 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%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

0

20 000

40 000

60 000

80 000

100 000

120 000

Cu

m Q

/Q P

erc

en

tag

e C

ha

ng

e

R M

illi

on

s

CUM Q/Q GFCF TOTAL BUILDING 2011 VS 2010 (*Q4)(Source: SARB, BMI-BRSCU Workings)

28

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

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))

% 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)


Total BC turned at about –21% and move to positive growth by third quarter 2011 . . .

CUM YTD % CHANGE: TOTAL BPP & BC: 1994-2012 (JAN)www.strategicforum.co.za

Total BPP has turned at -35% and has breached zero in first quarter 2011 . . .

29

-1 000 000

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

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)

Total Building NBIP (BPP-BC) Total Building BC 12 per. Mov. Avg. (Total Building NBIP (BPP-BC)) 12 per. Mov. Avg. (Total Building BC)


NET BUILDING IN THE PIPELINE: 1993-2012 (JAN)www.strategicforum.co.za

Total BC Trend-break occurred in mid 2006.

Recovery is on the way.


RES & NR TOTAL BC: CUM ACTUAL 2011 VS 2010: R MIOwww.strategicforum.co.za

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%

-10%

-9%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

8 000 000

9 000 000

10 000 000

11 000 000

Sq

ua

re M

etr

es

(m

2)

RES & NON RES TOTAL (INCL A&A): BC: CUM ACTUAL 2011 VERSUS 2010 BY MONTH: TOTAL RSA

(Source: StatsSA, BMI-BRSCU Workings)

Perc

en

tag

e D

iffe

ren

ce:

Cu

m A

ctu

al 2011 v

s 2

010


% DIFFERENCE IN CUM Y/Y BC : ACTUAL 2011 VS 2010:www.strategicforum.co.za

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

No

m2

R'0

00

No

m2

R'0

00

No

m2

R'0

00

m2

R'0

00

R'0

00

m2

R'0

00

m2

R'0

00

m2

R'0

00

m2

R'0

00

R'0

00

m2

R'0

00

m2

R'0

00

R'0

00

R'0

00

Dwellings <80m2

Dwellings >80m2

Flats and TH Other Total Office &Banking

Shopping Ind&WH Other Total A&ADwellings

A&A Other A&ATotalTotal

% Difference in Cumulative Y/Y BC: Actual 2011 vs 2010 by Segment: Total RSA(Source: StatsSA, BMI-BRSCU Workings)

32

0

868

2 888

1 323

192

1 777

9 547

1 781

10

2 596

20 981

498

558

974

190

758

2 450

756

6 081

12 266

6 851

986

0

1 0

00

2 0

00

3 0

00

4 0

00

5 0

00

6 0

00

7 0

00

8 0

00

9 0

00

10 0

00

11 0

00

12 0

00

13 0

00

14 0

00

15 0

00

16 0

00

17 0

00

18 0

00

19 0

00

20 0

00

21 0

00

22 0

00

23 0

00

PRIVATE RESIDENTIAL

Dwelling-houses < 80 m2

Dwelling-houses > 80 m2

Townhouses & Flats

Other (Incl. hotels & casinos)

Additions & alterations

PUBLIC RESIDENTIAL

Affordable Housing

General Government

Public corporations


TOTAL RESIDENTIAL


Offices

Shops

Industrial & warehouse

Other

Additions & Alterations


General Government

Public corporations


TOTAL NON RESIDENTIAL

Unrecorded Res Adds and Alts

INVESTMENT IN BUILDING BY SECTOR AND BY SEGMENT: 2011: M2*1000(TOTAL = 41 084 M2*1000)

(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)


CURRENT REALITY OF INVESTMENT IN BUILDINGBY SECTOR AND SEGMENT: 2010


THE LOCAL BUILDING LUMBER MARKET: 2001 – 2012 (FEB)

-

20 000

40 000

60 000

80 000

100 000

120 000

Jan 0

1

Apr

01

Jul 01

Oct 01

Jan 0

2

Apr

02

Jul 02

Oct 02

Jan 0

3

Apr

03

Jul 03

Oct 03

Jan 0

4

Apr

04

Jul 04

Oct 04

Jan 0

5

Apr

05

Jul 05

Oct 05

Jan 0

6

Apr

06

Jul 06

Oct 06

Jan 0

7

Apr

07

Jul 07

Oct 07

Jan 0

8

Apr

08

Jul 08

Oct 08

Jan 0

9

Apr

09

Jul 09

Oct 09

Jan 1

0

Apr

10

Jul 10

Oct 10

Jan 1

1

Apr

11

Jul 11

Oct 11

Jan 1

2

Cu

bic

Metr

es

Lumber Sales by End-use: Local Building: January 2001 - Jan 2012 (m3)(Source: Crickmay & Associates, BMI-BRSCU Workings)

Local Building 12 per. Mov. Avg. (Local Building)


LOCAL BUILDING LUMBER SALES VS TOTAL BC: 2002 – 2012 (FEB)

-50%

-30%

-10%

10%

30%

50%

70%

Jan 0

2M

ar

02

May 0

2Jul 0

2S

ep

02

Nov 0

2Jan 0

3M

ar

03

May 0

3Jul 0

3S

ep

03

Nov 0

3Jan 0

4M

ar

04

May 0

4Jul 0

4S

ep

04

Nov 0

4Jan 0

5M

ar

05

May 0

5Jul 0

5S

ep

05

Nov 0

5Jan 0

6M

ar

06

May 0

6Jul 0

6S

ep

06

Nov 0

6Jan 0

7M

ar

07

May 0

7Jul 0

7S

ep

07

Nov 0

7Jan 0

8M

ar

08

May 0

8Jul 0

8S

ep

08

Nov 0

8Jan 0

9M

ar

09

May 0

9Jul 0

9S

ep

09

Nov 0

9Jan 1

0M

ar

10

May 1

0Jul 1

0S

ep

10

Nov 1

0Jan 1

1M

ar

11

May 1

1Jul 1

1S

ep

11

Nov 1

1Jan 1

2

Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BC (m2): January 2002 - Jan 2012(Source: StatsSA; Crickmay Associates, BMI-BRSCU Workings)

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))


LOCAL BUILDING LUMBER SALES VS TOTAL BPP: 2002 – 2012 (FEB)

-50%

-30%

-10%

10%

30%

50%

70%

Jan

02

Mar

02

May 0

2

Jul 02

Se

p 0

2

Nov 0

2

Jan

03

Mar

03

May 0

3

Jul 03

Se

p 0

3

Nov 0

3

Jan

04

Mar

04

May 0

4

Jul 04

Se

p 0

4

Nov 0

4

Jan

05

Mar

05

May 0

5

Jul 05

Se

p 0

5

Nov 0

5

Jan

06

Mar

06

May 0

6

Jul 06

Se

p 0

6

Nov 0

6

Jan

07

Mar

07

May 0

7

Jul 07

Se

p 0

7

Nov 0

7

Jan

08

Mar

08

May 0

8

Jul 08

Se

p 0

8

Nov 0

8

Jan

09

Mar

09

May 0

9

Jul 09

Se

p 0

9

Nov 0

9

Jan

10

Mar

10

May 1

0

Jul 10

Se

p 1

0

Nov 1

0

Jan

11

Mar

11

May 1

1

Jul 11

Se

p 1

1

Nov 1

1

Jan

12

Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BPP (m2) : January 2002 - January 2012

(Source: Crickmay Associates, BMI-BRSCU Workings)

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))

Local Building Lumber Sales appear to be more closely correlated to Total BPP than to BC and also leads the revival?

36 © BMI-BRSCU

LOCAL BUILDING LUMBER SALES: CUM Y/Y 2011 VS 2010(DECEMBER)


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%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

Cu

bic

Me

tre

s

Lumber Sales by End-use: Local Building: Cum Y/Y 2011 vs 2010(Source: Crickmay & Associates, BMI-BRSCU Workings)

% C

ha

ng

e C

um

Y/Y

Lo

ca

l B

uil

din

g:

20

10

vs

20

09

37 © BMI-BRSCU

LOCAL BUILDING LUMBER SALES: CUM Y/Y 2012 VS 2011(FEB)


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%

-5%

-4%

-4%

-3%

-3%

-2%

-2%

-1%

-1%

0%

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

Cu

bic

Me

tre

s

Lumber Sales by End-use: Local Building: Cum Y/Y Jan 2012 vs 2011(Source: Crickmay & Associates, BMI-BRSCU Workings)

% C

ha

ng

e C

um

Y/Y

Lo

ca

l B

uil

din

g:

20

12

vs

20

11MAT FORECAST

38

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Gau

tra

in

Eskom

Infr

astr

uctu

re

Socce

r W

orld C

up

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

1993/0

11993/0

21993/0

31993/0

41994/0

11994/0

21994/0

31994/0

41995/0

11995/0

21995/0

31995/0

41996/0

11996/0

21996/0

31996/0

41997/0

11997/0

21997/0

31997/0

41998/0

11998/0

21998/0

31998/0

41999/0

11999/0

21999/0

31999/0

42000/0

12000/0

22000/0

32000/0

42001/0

12001/0

22001/0

32001/0

42002/0

12002/0

22002/0

32002/0

42003/0

12003/0

22003/0

32003/0

42004/0

12004/0

22004/0

32004/0

42005/0

12005/0

22005/0

32005/0

42006/0

12006/0

22006/0

32006/0

42007/0

12007/0

22007/0

32007/0

42008/0

12008/0

22008/0

32008/0

42009/0

12009/0

22009/0

32009/0

42010/'0

12010/'0

22010/'0

32010/'0

42011/'0

12011/'0

22011/'0

32011/'0

4

CU

M Q

/Q (

PR

EV

IOU

S Y

EA

R)

% C

HA

NG

E

Defining Events

R M

ILL

ION

S (

CU

RR

EN

T V

AL

UE

S)

GFCF CONSTRUCTION WORKS Q1 1993-Q4 2011: CURRENT VALUESCUMULATIVE Q ON Q (PREVIOUS YEAR) PERCENTAGE CHANGE(Source: SARB; BMI-BRSCU Workings)

Gross fixed capital formation: Construction works - Total (Investment) Cum Q on Q (Previous Year) % Change

CUM YTD Q4 2011 VS 2010 = + 6,08%

2011 VS 2010 = R166 267 MIO VS R166 267 MIO = + 6,08%ON TOP OF GROWTH OF + 0,45% IN 2010 VS 2009


GFCF CONSTRUCTION: Q1 1993-Q4 2011www.strategicforum.co.za


GFCF CONSTRUCTION: CUM Q/Q 2011 VS 2010www.strategicforum.co.za

Cum GFCFQ1

Cum GFCFQ2

Cum GFCFQ3

Cum GFCFQ4

Cum GFCF Construction 2010 42 330 83 479 124 374 166 267

Cum GFCF Construction 2011 43 199 85 787 130 063 176 378

Cum Q/Q % Change 2011 vs 2010 2.05% 2.76% 4.57% 6.08%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

6.50%

7.00%

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

Cu

m Q

/Q %

Ch

an

ge

R M

illi

on

(C

urr

en

t P

ric

es

)CUM Q/Q GFCF CONSTRUCTION: 2011 VS 2010 (Q4)

(Source: SARB, BMI-BRSCU Workings)

40 © BMI-BRSCU

DOMESTIC CEMENT SALES: 1997 – MAT* 2011 (* DECEMBER)

6 000 000

7 000 000

8 000 000

9 000 000

10 000 000

11 000 000

12 000 000

13 000 000

14 000 000

15 000 000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

To

nn

es

Annual Domestic Cement Sales: 1997 - MAT* 2012 (* Feb)(Source: Cement & Concrete Institute; BMI-BRSCU Workings)

41 © BMI-BRSCU

DOMESTIC CEMENT SALES BY MONTH: 1998 – 2012 (FEB)

400 000

500 000

600 000

700 000

800 000

900 000

1 000 000

1 100 000

1 200 000

1 300 000

1 400 000

1 500 000

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

To

nn

es

Domestic Cement Sales by Month: 1998-2012 (Feb)(Source: Cement & Concrete Institute; BMI-BRSCU Workings)

Domestic Cement Sales by month 12 per. Mov. Avg. (Domestic Cement Sales by month)

42 © BMI-BRSCU

DOMESTIC CEMENT SALES vs BPP: CUM Y/Y % CHANGE BY MONTH: 1999 – 2012 (FEB)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cumulative Y/Y percentage change by month:Domestic Cement Sales (Tonnes) vs BPP (M2): Jan 1999 - Feb 2012

(Source: StatsSA; Cement & Concrete Institute; BMI-BRSCU Workings)

Cum Y/Y % Change: Total Cement Sales (Tonnes)

Cum Y/Y % Change Total BPP (m2)

12 per. Mov. Avg. (Cum Y/Y % Change: Total Cement Sales (Tonnes))

12 per. Mov. Avg. (Cum Y/Y % Change Total BPP (m2))

43 © BMI-BRSCU

DOMESTIC CEMENT SALES vs BC: CUM Y/Y % CHANGE BY MONTH: 1999 – 2011 (DECEMBER)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cumulative Y/Y percentage change by month:Domestic Cement Sales (Tonnes) vs BC (M2): Jan 1999 - Dec 2011

(Source: StatsSA; Cement & Concrete Institute; BMI-BRSCU Workings)

Cum Y/Y % Change: Total Cement Sales (Tonnes)

Cum Y/Y % Change Total BC (m2)

12 per. Mov. Avg. (Cum Y/Y % Change: Total Cement Sales (Tonnes))

12 per. Mov. Avg. (Cum Y/Y % Change Total BC (m2))

Local Cement Sales appear to be more closely correlated to Total BPP than to BC and also leads the revival in BC?Related to Merchant anticipation of revival and stock build-up in anticipation?

44 © BMI-BRSCU

DOMESTIC CEMENT SALESCUM Y/Y COMPARISON BY MONTH: 2011 VS 2010 AND 2009 (DEC)


Cum YTD sales: 2010 672 676 1 513 26 2 544 08 3 351 90 4 291 21 5 195 07 6 171 11 7 141 12 8 121 19 9 077 97 10 123 8 10 870 3

Cum YTD sales 2011 & MAT Forecast 638 749 1 462 68 2 471 58 3 287 92 4 200 50 5 197 00 6 170 01 7 184 94 8 289 82 9 345 49 10 486 7 11 234 4

% Change Cum YTD 2011 VS 2010 -5.04% -3.34% -2.85% -1.91% -2.11% 0.04% -0.02% 0.61% 2.08% 2.95% 3.58% 3.35%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

0

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

To

nn

es

Domestic Cement Sales: Cumulative YTD December 2011 vs 2010 and 2009(Source: Cement & Concrete Institute; BMI-BRSCU Workings)

Cu

mu

liti

ve

% C

ha

ng

e:

YT

D 2

01

1 v

s 2

01

0

45

THE INDUSTRY DASHBOARD: MARCH 2012: BPP AND BC (DEC 2011), CEMENT (FEB 2012) AND LUMBER SALES (JAN 2012).

DOMESTIC CEMENT SALES (TONNES) ENDED 2011 AT +3,35% COMPARED TO 2010

Cumulative Y/Y January 2012 for Domestic Cement Sales recorded an increase of + 21,96% compared to 2011, followed by Cumulative Y/Y increase of +13,74% in February thus a good start to 2012.

The MAP Forecast for Domestic Cement Sales shows marginal growth of + 1,79% for 2012 vs 2011.

LOCAL BUILDING LUMBER SALES (M3) ENDED 2011 AT +14,6% COMPARED TO 2010.

Cumulative Y/Y January 2012 recorded a decrease of -4,10% compared to 2011. Although it is early in the New Year it does appear as if Lumber Sales running out of steam compared to the buoyant growth in 2011.

The MAP Forecast for Local Building Lumber Sales (in m3) shows a level outlook of -0,00% for 2012 vs 2011.

TOTAL BUILDING PLANS PASSED (M2) ENDED 2010 AT -11,17% COMPARED TO 2009.

Cumulative Y/Y building plans passed (BPP) by larger municipalities (in m2) for YTD Dec 2011 decreased by

-0,64% compared with Dec 2010.

• BPP for Residential Buildings (including Additions and Alterations) decreased by – 0,31%.

• The decrease reported for non residential buildings BPP (including A&A) was – 1,36%. Longer term trends in the non-residential sector still reflect falling demand levels.

Total Building BPP DECLINED by – 0,64% for 2011 vs 2010.

THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2011 & 2012

46

TOTAL BUILDINGS COMPLETED (M2) ENDED 2010 AT -27,87% COMPARED TO 2009.

Cumulative Y/Y buildings reported as completed (BC) (including A & A) to larger municipalities (in m2) for YTD Dec 2011 decreased by – 7,50% compared with Dec 2010.

• The largest percentage decrease in the value of buildings reported as completed (BC) (including A & A) was reported for Non residential building (including A & A) (- 16,20%), whilst

• Residential buildings recorded a decline (- 3,40%)

It is our view that the decline in Residential Investment should decrease month on month from now on and in spite of the expected decline in Non Residential activity (about half that of Residential Building) will contribute to the positive growth in Total Investment in Building from the second to third quarter of 2012.

Residential BC (including A & A) shows marginal decline of – 3,40%, Non Residential BC (including A & A) shows DECLINE of – 16,20% and Total Building shows DECLINE of – 7,50% for 2011 vs 2010.

From the foregoing comparisons it can be seen that ALL the indicators indicate a turning point and MAT Forecasts indicating gradual growth (less negative).

It still remains to be seen whether the gradual improvement in BPP and BC from the levels achieved in 2010 will be encouraged by the increasing willingness of the Banks to relax their stringent lending criteria so that Mortgage Advances can flow into the industry. At this stage it is mainly first time homebuyers in the middle income sector that are benefiting.


47


-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Pe

rce

nta

ge

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Total Res BC Cum YTD % Change (m2) -13.68% -9.13% 3.09% -0.18% -7.48% -3.69% -5.13% -6.62% -3.95% -2.95% -3.41% -3.40%

Total Non Res BC Cum YTD % Change (m2) -27.22% -3.67% -10.82% -9.64% -13.66% -8.22% -17.75% -19.86% -18.45% -19.69% -16.83% -16.20%

Total BC Cum YTD % Change (m2) -17.93% -7.58% -1.42% -3.25% -9.44% -5.12% -9.29% -10.92% -8.60% -8.45% -7.76% -7.50%

Domestic Cement Sales (Tonnes) -6.69% -6.09% -5.99% -5.18% -4.82% -3.31% -2.29% -1.56% 0.18% 2.27% 2.95% 3.35%

Local Building Lumber Sales (m3) 34.58% 19.62% 17.38% 12.86% 12.56% 15.57% 15.78% 14.61% 17.48% 15.67% 14.10% 14.60%

Cumulative YTD Buildings Completed (BC), Domestic Cement Sales and Local Building Lumber Sales: % Change by Sector: January - Dec 2011

(Source: StatsSA; BMI-BRSCU Workings)

48


-5%

0%

5%

10%

15%

20%

25%

Pe

rce

nta

ge

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Total Res BC Cum YTD % Change (m2) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total Non Res BC Cum YTD % Change (m2) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total BC Cum YTD % Change (m2) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Domestic Cement Sales (Tonnes) 21.96% 13.74% 8.13% 6.11% 4.79% 3.87% 3.26% 2.80% 2.42% 2.15% 1.92% 1.79%

Local Building Lumber Sales (m3) -1.97% -1.29% -0.99% -0.78% -0.64% -0.55% -0.47% -0.41% -0.37% -0.33% -0.31% 0.00%

Cumulative YTD Buildings Completed (BC), Domestic Cement Sales and Local Building Lumber Sales: % Change by Sector: January - Dec 2012

(Source: StatsSA; BMI-BRSCU Workings)

MAT FORECAST

49

AFFORDABLE HOUSING DELIVERY AND BACKLOG: 2002-2010

LOWER MIDDLE ROAD SOYUZ AND HIGH ROAD COLUMBUS SCENARIO: 2011-2020

(Source: StatsSA and BMI-BRSCU Workings)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

AN

NU

AL

HO

US

ING

DE

LIV

ER

Y (

UN

ITS

)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

2,400,000

2,600,000

AN

NU

AL

HO

US

ING

BA

KL

OG

(U

NIT

S)

DOH Delivery: Lower Middle Road Soyuz Scenario DOH Delivery: High Road Columbus Scenario

Annual Housing Backlog under Columbus Scenario Annual Housing Backlog under Soyuz Scenario


THE ROLE OF AFFORDABLE HOUSING IN BUILDING: 2011-2020www.strategicforum.co.za

3,12 Million houses built in next 10 years and

Backlog reduced to I million by 2020.

The target remains the eradication of all

slums, or informal settlements, by 2014. For

this to happen, some 500 000 new units a year must become available, according to

the Department of Housing’s Strategic Plan.



TOTAL INVESTMENT IN BUILDING: 2000-2009

THE STRATEGIC FORUM SCENARIOS: 2010-2020(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)

15,000

40,000

65,000

90,000

115,000

140,000

165,000

190,000

215,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

R M

ILL

ION

S (

2009 V

AL

UE

S)

TOTAL BUILDINGS : 2000-2007: LOWER MIDDLE ROAD SOYUZ SCENARIO: 2008-2015

1984 PEAK LEVEL OF INVESTMENT

TOTAL BUILDINGS HIGH ROAD COLUMBUS SCENARIO

TOTAL BUILDINGS LOW ROAD CHALLENGER SCENARIO

TOTAL BUILDINGS HIGHER MIDDLE ROAD APOLLO SCENARIO


CURRENT MOST LIKELY SCENARIO

BETWEEN SOYUZ AND CHALLENGER

The difference between “high road” and “lower middle road” could be R350 Billion and 700 000 jobs over the 10 years to 2020.


TOTAL INVESTMENT IN CONSTRUCTION BY SEGMENT: 2002-2020www.strategicforum.co.za

INVESTMENT IN CONSTRUCTION: 2001-2010

THE STRATEGIC FORUM SCENARIOS: 2011-2020(Source: SARB, StatsSA, MFA, BMI-BRSCU Workings)

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,0002001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

R M

ILL

ION

S (

20

10

VA

LU

ES

)

MOTORWAY SCENARIO: 2007-2015 HIGHWAY SCENARIO: 2007-2015 FREEWAY SCENARIO: 2001-2015

BYWAY SCENARIO: 2001-2015 Peak 1980 Level

The current

MOST LIKELY FUTURE

is the

FREEWAY SCENARIO


52 © BMI-BRSCU

Sector and Segment 2010 2011 2012 2013 2014 2015

Total Private Residential -18.39% 2.82% 3.77% 6.98% 8.96% -2.16%

Total Public Residential 42.74% -12.25% 2.76% 1.98% -0.20% -21.38%

Total Residential 37.47% -5.43% 3.26% 4.44% 4.43% -11.26%

Total Private Non-Residential -24.19% -11.47% -10.22% 4.24% 6.54% 15.16%

Total Public Non-Residential 21.07% -3.60% -6.69% 7.21% 7.35% 10.11%

Total Non Residential 5.93% -5.48% -7.55% 6.51% 7.35% 11.27%

Total Unrecorded Additions & Alterations -11.90% -1.89% -6.06% -5.38% 12.54% -4.54%

Total Investment In Building 11.33% -4.73% -0.03% 0.03% 0.07% -0.01%

Total Investment In Construction 5.08% 0.82% -5.59% -8.88% 8.44% 7.19%

Total Investment In Building and Construction 7.98% -1.83% -4.20% -2.48% 7.68% 2.45%

Year on Year Growth

INVESTMENT IN BUILDING AND CONSTRUCTION: 2010-2015 (CONSTANT 2010 VALUES) (REVISED MARCH 2012)

53 © BMI-BRSCU

THE GREAT RESET IN TECHNOLOGYwww.strategicforum.co.za

54 © BMI-BRSCU

Dear Llewellyn, Your documents on SlideShare have had 10,000 views.

Wow! You must be doing something right.

Your slides and docs must be pretty awesome in order to get that many views.

Keep it up ... we can't wait to see what you share next.

Congratulations,The SlideShare team (18 February,2012)


55 © BMI-BRSCU


56 © BMI-BRSCU


57 © BMI-BRSCU


58 © BMI-BRSCU


“Finished ought to be an F-word for all of us. We are all works in

progress. Each day presents an opportunity to learn more, do more, be

more, grow more in our lives and careers. Keeping your career in permanent beta forces you to acknowledge that you have bugs, that

there’s new development to do on yourself, that you will need to adapt

and evolve. But it’s still a mind-set brimming with optimism because it celebrates the fact that you have the power to improve yourself and, as

important, improve the world around you. ”


TowardsBuilding, the Engine for growth and wealth creation

Dr. Llewellyn B. LewisMARCH 2012

THE STRATEGIC FORUMA place of assembly

for strategic conversations


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