south Africa-Work from home is having a surprise knock-on impact in South Africa

  • 27 June 2022 / News / 405 / Fares RAHAHLIA

south Africa-Work from home is having a surprise knock-on impact in South Africa

The latest FNB/BER Building Confidence Index shows contractor confidence in South Africa rose to a more than five-year high in Q2 2022, primarily on the back of a work-from-home shift and the infrastructure damage caused by natural disasters in parts of the country.

“The extent of the improvement in residential building activity was surprising given the deterioration in the broader macroeconomic environment over the past few months,” said Siphamandla Mkhwanazi, senior economist at FNB.

“However, a number of specific factors likely played a role, including work relating to the conversion of office space to residential space, as well as rebuilding efforts following various disruptions, particularly in KwaZulu-Natal.”

Activity among non-residential contractors was flat, but at a reasonably good level over the same time period, said Mkhwanazi.

“It is encouraging that building activity, especially in the residential sector, rose noticeably in the quarter. However, there are two caveats. The first is that this comes off a low base. The second is that there is little indication, both from builders and from architects, that this will continue in coming quarters, at least not at the same pace,” he said.

Growthpoint Properties, South Africa’s largest domestic office landlord with 161 properties, meanwhile, said that it continues to see a shift in office developments and working from home.

“Economic imperatives are driving some companies to reduce their office spaces, and work-from-home routines are creating uncertainty about future space requirements. The good news is that the initial sentiment that offices would no longer be needed is receding with hybrid working patterns set to endure.

“Bigger businesses are returning their staff to offices with different strategies, some fully with others are still on a rotational system. We have started to see smaller tenants that previously vacated their offices return to the market.”

Growthpoint said that the office sector is particularly stressed in Gauteng and Sandton specifically, although it expects this business and financial hub to recover in due course. In conversation with its clients, Growthpoint said that it is seeing different dynamics.

“Technology has made it easy for people to work remotely, and staff save on the time and cost of travelling. But not all staff have access to ideal working environments at home or standby power in the case of outages. At the same time, they still miss their office environment and the social interaction that comes with it,” it said.

Although many companies are still uncertain of their future working arrangements, the hybrid model appears the be a front runner for now, the group said.

source: BusinessTech

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