The construction and building materials sector had been struggling to match the performance of the all share index for 18 months before overtaking it in February and starting to deliver the expected growth in value.

In the residential property market, the bakkie-builder and DIY markets have driven much of the growth in share prices and earnings. The benign interest rate environment has boosted spending on building and building materials way beyond analysts' expectations.

Last year it was expected that cement demand would grow by 6%-8%, but it came in at 12%.

Though development in this sector is expected to taper off, there are encouraging signs that government has started to award contracts and is spending some of the R375bn earmarked for infrastructure development, which will provide compensating support against any fall in demand from the residential market.

It seems the good times are here for a while, given that many of the low-margin contracts undertaken in the viciously competitive market three to four years ago are now coming to an end.

Most of those who watch this sector predict a prolonged upswing, though warning that there will be blips. What has perhaps surprised the market in this sector is the strong performance of the building materials market. That's why Ceramic Industries, the listed tiles and sanitaryware manufacturer, sparkled last year.

"If you have this sort of momentum it is likely to continue and even increase confidence," says Pierre Fourie, CEO of Master Builders of SA.

The top performing company in this sector was PPC again, whose CEO John Gomersall says he could not have predicted how strong demand would be. Domestic demand was double what the market had expected, while regional demand was up almost 11%.

The civils sector consumption of cementitious products was up 47% last year on 2004 to 539 000/t.

PPC's market capitalisation was recorded as R11,98bn at the end of March last year. In the past 12 months this has grown 88% to R22,52bn.

Over the past eight years, the share price has grown from about R30/share to R419 in March this year.

Gomersall recently noted the increase in foreign investor interest in PPC. But interest in PPC has been mirrored across the sector by remarkable growth in value of many companies.

The combined market capitalisation of last year's top five was R24,6bn; this year it has grown a whopping R46,7bn.

Wilson Bayly Holmes Ovcon (WBHO), more focused on building than on civils, has been the pick of market watchers. Its success is partially attributed to its ability to attract repeat business and its excellent risk management. It has had far fewer dud projects than Murray & Roberts and Aveng.

Independent analyst Mark Ingham says WBHO negotiates contracts rather than tenders for them. Its clients are faithful to the point of waiting for a gap in its order book before laying out the cash for a new project. A faithful repeat customer is Netcare.