According to BDlive, ratings agency Global Credit Ratings (GCR) says a slowdown in available infrastructure projects and rising costs may hit South Africa's infrastructure rollout plan to 2020. GCR says many companies operating in the domestic construction sector face declines in order books, while also experiencing tighter margins.
While "many companies have sufficient secured contracts to maintain revenue at current levels through [next year]," Eyal Shevel, GCR's head of corporate ratings said, there was "little in the way of new projects" and that medium-term order books were "looking a bit thin." The agency also points to Standard and Poor's downgrade of the country's sovereign credit rating, saying that the outlook for the sector has "deteriorated further."
Despite recent indications by some of South Africa's major construction and engineering groups of more positive market trends and SA government claims that more than R1-trillion would be spent on infrastructure projects over the next eight years, the ratings agency said there was "no certainty on the financial feasibility of these initiatives", BDlive reports.
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