Home Business and Technology Nedbank reports SA capex of R63.9 billion

Nedbank reports SA capex of R63.9 billion

The total value of capital expenditure projects announced in the first six months of the year amounted to R63.9 billion, which translates to an annualised value of R127.8bn compared to R68.2bn last year, according to Nedbank’s latest capital expenditure project listing report.

Nedbank said the value had only been supported by the signing of the much-delayed fourth round of the Renewable Energy Independent Power Producer Procurement Programme (Reipppp).

These projects were valued at R39.8bn. Excluding the Reipppp, the value of projects announced amounted annualised to R51.8bn.

The report largely lists only capital projects valued at R20 million or more that highlight significant areas of investment expenditure and not the absolute total value of all capital investment undertaken in the country.

Nedbank said it served as a rough guide to the general direction in which investment was moving and as an indication of the level of confidence in the economy.

It said the number of projects increased slightly to an annualised 58 compared to 54 last year, with the private sector announcing 95 percent of the total value of the projects, including the Reipppp, and 62 percent of the number of projects.

Nedbank

The report said there was also some improvement in the value and number of projects announced by public corporations while projects announced by general government remained low.

It said fixed investment activity remained weak and was still lagging the improvement in business confidence following the ANC’s leadership transition in December.

Cautious Domestic demand also remains subdued, which together with existing adequate capacity and policy uncertainty was causing investors to remain cautious of committing to long-term large investment projects, it said.
report said that some recovery in private fixed investment spending was forecast later this year, but overall it would remain weak.
It said that new uncertainties were also growing over the recent proposals to accelerate land reform through the potential use of expropriation without compensation. Nedbank forecast a modest increase of 0.9 percent in gross fixed capital formation this year from 0.4 percent last year.

The report said activity in the mining and manufacturing sectors had been significantly slower to respond to more robust global conditions than in previous cycles. Nedbank said the manufacturing sector announced only seven projects worth R7.4bn or 11.6 percent of the total in the first half of this year.

This was almost unchanged from the five projects worth R7.7bn that had been announced during the same period last year.
It said the value was pushed up by Sincopec/Chevron’s plan to develop an oil refinery plant in Cape Town worth R6bn in the next five years, Corobrick’s plan to build a new 100 million bricks a year factory in Driefontein for R800m and Lonmin’s R250m crude nickel sulphate purification plant in North West.

Source: IOL

Also read

South Africa to view longest eclipse in a century

New Scam Alert – Careful of Fake FNB inContact Messages

16 cheapest cars for sale in South Africa right now

 

Loading...

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.