Cement Sales Fall as SA Housing Market Remains Weak

January 14 - The relatively weak housing market in South Africa has an affect on secondary industries as well, as could be seen by the statistics released by the Cement and Concrete Institute this week.

According to the group, cement sales in South Africa dropped for the third consecutive year in 2010.

This was due to a slowdown in the country's construction industry and a weak housing market.

The sale of concrete declined 13% in 2009, compared to 7.8% (or 10.87 million metrics) last year, said the Institute.

Late last year, the continent's largest maker of cement, Pretoria Portland Cement Company, issued a statement, forecasting what this year has to hold for the industry.

It said that the outlook for South Africa was the demand for cement would remain "subdued".

Pretoria Portland said that the South African government's infrastructure plans "bode well for medium and long term cement and aggregate demand in South Africa."

Absa Group Ltd. predicted that the recovery of the housing and construction markets will be slow.

House prices, according to Absa, will rise 5% in 2011, a drop from 7% in 2010.

The South African central bank cut interest rates to 5.5% last year.

This was the lowest interest rates reported in 30 years and the government hopes that it will spur consumer spending and help South Africa on its road to recovery from the tough recession.

1/14/2011 9:41:00 AM