There were two striking headlines in the news recently. One said the South African construction sector was facing its worst recession in 40 years, while the other said a construction boom in Nigeria was likely to see cement demand doubling this year.

Cement is a good indicator of how countries are faring, even though “experts” seldom use it, preferring to focus on commodities or financial sector performance to gauge wellbeing. A quick survey of the cement industry in Africa north of the Limpopo suggests that contrary to South Africa’s post-World Cup blues, Africa is awash with construction plans, constrained only by a shortage of cement.

A research note by Stanbic IBTC, Standard Bank’s Nigerian operation, says local cement demand in that country is expected to grow by 45% this year, and production by 63%, driven by spending on infrastructure.

Nigerian billionaire Aliko Dangote recently listed his cement empire on the Nigeria Stock Exchange in the bourse’s biggest transaction ever. The company has invested in cement operations in more than seven African countries, including South Africa, where it paid more than R1 billion (US$140 million) for a 64% stake in local producer Sephaku Holdings.

Cement demand in east Africa is expected to rise by 33% next year, with construction listed as a major driver of economies in the region.

In Zambia, it is the same story, with the largest producer there, Lafarge Cement Zambia, increasing capacity by 830,000 tons a few years back in anticipation of rising demand locally and in neighbouring Democratic Republic of Congo. In Mozambique, four new cement projects have been approved this year for the southern region alone, with more expected in the north, where major mining projects are starting up.

Pakistan’s largest producer, Lucky Cement, estimates demand in Africa exceeds supply by as much as seven million tons a year. It also estimates growth in the construction industry is growing at an average of 25% a year. The company, already a big exporter to African countries, is among a number of investors from India, Brazil, China and Europe planning to invest in cement projects in Africa, taking a long-term view of growth on the continent.

Demand is being driven by billion-dollar government infrastructure projects; resource demand, with the building of whole towns near new oil and mineral finds; and the growth of residential and retail/office property developments linked to a rising African middle class. African analyst Duncan Bonnett of consulting firm Whitehouse & Associates says the firm is tracking 35 new cement projects in southern Africa alone.

But one of South Africa’s largest producers, Pretoria Portland Cement (PPC), reported three successive years of declining cement demand and a 15% fall in headline earnings. The cement industry generally reported a drop in local and regional sales last year over the previous year.

Of course, the statistics obscure certain realities. One is that most African countries are seeing this growth off a low base relative to South Africa. Another is that planning can be affected by delays in state infrastructure projects. And some countries have protectionist measures in place to stimulate local producers, which struggle to be competitive because of high production costs. This is an upside, however, for companies basing themselves in those markets, rather than exporting to them.

Many African markets offer robust profit margins — Stanbic says that, in Nigeria, the industry margin was 25% last year and is expected to rise to 34% in 2012 — and supportive government policies to attract investment in cement, which offset some of the costly structural problems in African economies. The cement story in the rest of Africa has important messages for South African business. One is that opportunities are being exploited by less risk-averse investors from inside and outside Africa, reducing space for South African companies still sitting on the fence and hoping for the local market to deliver.

South African companies relying on exports to their traditional southern African markets may see demand slipping as these countries increase local capacity. Investing in the rest of Africa is a long-term game. South African executives had better start dusting off their African strategy plans sooner than later, before they miss the boat.

Dianna Games is executive director of Africa @ Work. The article was first published in Business Day.