Confidence in South Africa’s building sector weakened further in the second quarter as rising input costs and heightened uncertainty linked to the conflict in the Middle East weighed on activity and profitability across the industry.The FNB/BER building confidence index fell four points to 38 in the second quarter, with more than 60% of respondents dissatisfied with prevailing business conditions.The softer sentiment reading reflected weaker activity and profitability across much of the building sector value chain, with subcontractors recording the largest deterioration in confidence.Activity among nonresidential builders, which had surged in the first quarter and helped lift overall sector performance, lost momentum in the second. Survey respondents also reported a notable increase in the lack of new demand as a business constraint, suggesting growing pressure on order books.FNB senior economist Siphamandla Mkhwanazi said the sector’s recovery was interrupted by uncertainty stemming from geopolitical developments.“Work in the nonresidential building sector has gained momentum since 2024, despite starting from a low base. This has been disrupted by higher internal costs and greater uncertainty linked to the war in the Middle East, leading to project postponements. Projects that are proceeding are also significantly less profitable than they otherwise would have been,” he said.The residential building market also remained under pressure.While building plans data had pointed to a potential improvement in residential activity this year, the latest survey results indicated further weakness in available work. Mkhwanazi said shifting interest-rate expectations relative to the first quarter probably contributed to the subdued sentiment.The survey findings suggest the sector remains on a weak footing after the real value of building investment contracted by 8.4% year on year in the first quarter, following a 10.8% drop in the final quarter of 2025.Among the various industry participants surveyed, subcontractors experienced the sharpest deterioration in confidence, with the index falling 17 points to 35 amid sharply lower activity levels.According to Mkhwanazi, the weakness reflects slower activity among main contractors and growing financial pressure on consumers.“This is in line with the weaker activity among main building contractors but also likely reflects softer demand for smaller projects. These would typically be initiated by the homeowner or landlord who is now facing rising costs and cutting back on discretionary spending,” he said.By contrast, some parts of the building pipeline showed greater resilience.The index measuring architect activity remained relatively firm despite easing from first-quarter levels, suggesting early interest in building projects has largely held up.Quantity surveyors reported stronger activity, with confidence rising to 46 from 43 previously.“In an environment of rising and uncertain costs, it is not surprising that quantity surveyors are experiencing stronger demand,” Mkhwanazi said.Manufacturers of building materials reported a sharp increase in production costs during the quarter. Despite the cost pressures, confidence improved four points to 23, though sentiment remained subdued.Hardware retailers also reported lower confidence, consistent with subdued sales volumes, though trading conditions remained relatively buoyant.Overall, the survey points to a sector facing mounting pressure from higher costs, weaker demand and a more uncertain operating environment.“An overarching theme in this quarter’s results is the war in the Middle East, which saw input costs jump significantly between the first and second quarters. “In some cases, projects scheduled to commence were put on hold due to higher costs and general market uncertainty. Absent this shock, sentiment would likely have remained stable, if not improved on its first-quarter level,” Mkhwanazi said.