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- Nedbank’s listing shows a sharp increase in fixed investment plans in the first half of 2024, as measures to address power shortages started yielding results, logistical constraints eased somewhat, and disinflation persisted.
- The value of new projects announced during the first half of the year increased to an annualised R793.7 billion, up sharply from R193.2 billion in 2023.
- The government replaced the private sector as the major driver, with plans totalling an annualised R393.3 billion, accounting for 50% of all new projects announced in the first half of 2024.
- Public corporations announced projects worth an annualised R194.4 billion (24% of the total), significantly up from R34.7 billion in the previous year.
- The private sector announced plans amounting to an annualised R206 billion, or around 26% of the total value of announced projecDespite the improvement, Nedbank expects gross fixed capital formation (GFCF) to fall by 2.5% in 2024, down from 4.2% in 2023, mainly due to the lag between project announcements and actual implementation.
- The impact of the pickup in capital expenditure plans in 2024 will likely materialise in 2025. Even so, the risks to the outlook remain to the downside, given a fragile global economy, and delays in local economic reforms, which could result in cancellations or postponements in implementing some of the announced project plans.