Johannesburg — OPTIMISM in the construction sector abounds despite falling demand for commercial and residential building and the global financial crisis, according to a global KPMG survey.

The survey - concluded in November and published yesterday - covered construction companies in 30 countries with revenue from 250m to 5bn.

According to the survey 53% of global respondents said their backlog of jobs had gone up or stayed level.

Profits are projected to be low this year due to the order backlog. Contractors in Africa, Europe and the Middle East appeared to have been hardest hit with 54% indicating their projected profit rates had declined.

Geno Armstrong, international sector leader of KPMG's engineering and construction practice, said: "There is a perception that the global financial crisis has devastated the construction industry. While it certainly has had a significant impact on the way these companies do business, we've found that they view these conditions as an opportunity to get leaner."

Armstrong said when the recovery does finally arrive, these companies should be well-prepared to succeed.

KPMG Africa construction partner Gavin Maile said that in SA profit rates for new contracts were coming under pressure, especially in the housing sector, with numerous contractors bidding on each contract.

"While globally the future for the industry promises huge government stimulus packages with the potential to reinvigorate the infrastructure market, it is unclear how much money will be made available for infrastructure and where it will find its way," Maile said.

"This is a matter of much debate in the boardrooms of engineering and construction companies around the globe."

He said the situation in SA was slightly different, where a significant number of infrastructure projects had begun before the downturn, especially in the areas of power generation, roads and football stadia.

Only 12% of global respondents thought proposed government stimulus packages would bring a significant increase in opportunities over the next 24 months. Although contractors in the Asia-Pacific region had the most confidence in government packages, 82% expected a moderate or significant increase in opportunities over the next 24 months.

At least 43% of respondents from Africa, Europe and the Middle East believed that such stimuli would have no demonstrable effect in that timeframe.

In contrast, 73% of American respondents were expecting some stimulus impact by mid-2011.

"The direct impact of South African infrastructure projects, on the other hand, is already flowing through the local economy," Maile said.

The survey also showed that many talented individuals had returned to SA.