The SA construction industry is set to emerge from recession in 2019 but growth will remain tepid at 2.4%, says Fitch Solutions.

The sluggish growth in SA spells more troubles for struggling construction and building companies in the country, the research firm said in a report e-mailed on Friday.

This is likely to delay the turnaround of cash-strapped construction firms such as Aveng, Basil Read and Group Five, whose fortunes largely depend on the recovery of the construction industry.

The local industry will drag down the performance of the construction industry in Southern Africa compared to other sub-Saharan Africa regions, Fitch said.

In its 2019 sub-Saharan Africa construction growth outlook, Fitch says it expects the construction industry in the region to grow by 6.8% year on year, “which will continue over the medium term as investment flows into the region in order to meet pressing infrastructure needs”.

Ethiopia will remain the region’s top performer, with its construction industry value likely to increase 12.3%.

But construction in Zambia is likely to contract 2.3% in 2019 as the government faces a fiscal crisis and rising risk of debt distress. The sector in Namibia is forecast to slow down as major projects come to an end.

“In Namibia, the completion of the country’s largest construction projects, new container and liquid bulk terminals at Walvis Bay port, will cause the sector to contract by 3.5% year on year as there is a lack of new projects to drive growth,” says Fitch.