News
GROWTH IN CONSTRUCTION
POSITIVE FOR ALL LINKED INDUSTRIES
By the cidb
Employment in the construction sector has grown by 17 % in the past year with more than 156 000 new jobs created in the
12 months leading up to the second quarter of 2021 . The construction sector plays a pivotal role in many industries down the line and the growth is seen as a very positive trend linked to industries such as electrical , wet services and HVAC . Although this growth is a welcome trend , it should be noted that this improvement / growth is coming off a low base in 2020-Q2 when there was a lockdown and very low activity taking place .
“ These are encouraging signs that construction and engineering is recovering from the economic downturn and the impact of the pandemic , and benefit from expected higher levels of investment in infrastructure , says Bongani Dladla , the acting Chief Executive of the Construction Industry Development Board ( cidb ).
However , there has been sharp decline in employment since 2017 and the number of people working in both formal and informal construction is currently at the same level as in 2014 .
The quarterly figures are based on own-research conducted by the cidb through its SME Business Conditions Survey , as well as the quarterly labour force survey and quarterly employment statistics released by StatsSA .
Dladla says the construction industry is an important player in job creation with an impact on a range of other sectors too such as manufacturing , mining , transportation , real estate , and business services .
Construction is one of the industries that have higher employment shares relative to its contribution to the gross domestic product . The sector accounts for 8 % of total formal employment while its share of nominal GDP is 2.5 %.
Between the second quarters of 2020 and 2021 the number of people employed in construction increased by 156 000 on a year-on-year basis and 143 000 on a quarter-on-quarter basis .
The figures show that employment in the formal construction sector accounts for 65 % of jobs in the industry and 35 % in the informal construction sector , says Dladla . Since 2009 jobs in the informal sector grew by 3.5 % while there was a decline of 0.4 % in the formal construction industry .
By the end of the second quarter of 2021 the formal construction sector employed some 476 185 with the bulk of people – 56 % – working in civil engineering and some 38 % in general building .
Analogicus | Pixabay
Increased activity in the construction sector plays a piviotol role in many industries down the line .
The effect of the downturn , the Covid-19 lockdown and the lack of demand for construction is reflected in the job losses that were experienced in the sector . At the end of 2021-Q2 , StatsSA Quarterly Employment Statistics ( QES ) showed that construction employment declined by -2.4 % year on year , -6.4 % in civil engineering and 3.4 % general building .
“ Construction constitutes 16 % of employment in the informal sector , which is a significant contribution ,” says Dladla . During the period under review there was an 11 % growth in job opportunities on a year-on-year basis .
Studies by the International Labour Organisation show that the informal sector tends to grow during economic crises because it acts as a default option for survival or maintaining income , this is also reflected in the growth of the construction informal sector as compared to the construction formal sector .
The informal sector includes the self-employed in microbusinesses that are not registered for income tax or VAT as well as short-term and casual employees . Most of these enterprises have linkages with the formal sector through subcontracting and the provision of labour-only services .
Dladla says the cidb ’ s research indicates that the shortage of skills is one of the biggest constraints for business growth experienced by contractors . This shortage also drives up the cost of labour resulting in decreased profit margins for small and medium contractors . The cidb B . U . I . L . D Programme announced by Public Works and Infrastructure Minister in 2020 , is designed to provide workplace learning opportunities to university and college graduates to grow skills for the construction industry . RACA
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