Associations
SIGNS OF NEW LIFE IN THE LOCAL
CONSTRUCTION SECTOR
By Bongani Dladla , chief executive officer of the cidb
There are indeed some green shoots in the local construction industry , despite the dire predictions that the sector is facing imminent collapse .
2023
will be a consequential year of recovery after the industry was hit by successive waves of adversity in recent times – a universal pandemic , a sharp economic downturn , ongoing energy woes , and a regional conflict which threatens to deliver long-term , global consequences .
Construction is often a bellwether indicator of the health of the broader economy , even though it currently accounts for approximately 3 % of Gross Domestic Product . If there is an uptick in construction activity it may well lead to a recovery in other sectors such as manufacturing , retail and technology .
Several recently published reports conclude that there is an upward movement in construction activity which may have a ripple effect on the broader sector , including emerging contractors , black-owned and women-owned enterprises .
The SA Construction Market Report , published by Construct Africa projects that the industry will stabilise at an annual average growth rate of 3 % from 2023 to 2026 . This will , predominantly , be on the back of expected major investment flowing from government ’ s R2.3-trillion infrastructure plan and the benefits flowing from the Economic Reconstruction and Recovery Plan . The bulk of this spending will go towards catalytic public infrastructure projects in the fields of energy , transport , housing , and digital infrastructure . A construction project pipeline to the value of R340-billion has already been announced .
The Afrimat Construction Index , published in September 2022 , is also cautiously optimistic . It reports that , the construction sector increased the value added to the economy by 4.1 % in real terms in the second quarter of the year .
This was achieved despite the negative impact of events such as load shedding , the floods in KwaZulu-Natal and a sharply higher fuel price . It notes increases in both the volume and value of construction material – leading indicators of future construction activities , and an increase in employment , which is expected to accelerate once the infrastructure activities gather momentum .
The findings of the two external reports match that of the
Construction Industry Development Board ’ s ( cidb ) own research conducted in partnership with the Bureau for Economic Research .
James Sullivan / Unsplash
Will 2023 be a year of recovery ?
Our most recent Small and Medium Enterprises ( SME ) Business Conditions Survey reflects an improved sentiment within the industry and an optimism that the coming period will deliver higher levels of construction activities and growths in profitability .
These are important indicators for the cidb which play a pivotal role in the sector as a regulator , facilitator and catalyst for development and transformation . We have a vision of a construction sector that is inclusive , ethical and a primary contributor to a prosperous economy .
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