Opportunities for medium sized contractors

Sector recovery and Government expenditure
The RMB/Morgan Stanley report of January 2013 also predicts no real growth in the construction sector for 2014. However, the report indicates an expected increase in fixed investment in 2015 driven by Eskom, Transnet and SANRAL projects. They are also firm in their view that sector recovery is heavily reliant on government infrastructure expenditure. On a more positive note, the RMB/Stanley report of February 2013 suggests that required government expenditure would be driven by supply and demand imbalances. The poor provision of electricity and water in particular has become a critical issue for Government.
Construction industry’s current employment contribution
In spite of the challenges, the construction industry’s economic contribution to GDP stands at 8,7% for 2013, with the same 8,7% forecast for 2014. According to Industry Insight, there were approximately 483 651 people employed in the South African construction industry in 2011. Of these, 35% were employed in civil works. At present, construction contributes a significant 8% of total employment across all work sectors countrywide.
More significant opportunities for job creation
What’s more, since this sector will require goods and services from other sectors, another 1 397 jobs could be created. The direct, overall impact means a possible 3 377 jobs with another 1 590 jobs indirectly supported; the affected sectors supplying the building and construction sector will have to increase their outputs. With this in mind, and considering the planned R3,2 trillion allocated for future investment in the South African building and construction sector, there are potentially even more significant opportunities for job creation. Translated, this means future Government expenditure of almost 30% of GDP by 2030.
Part 1 of 3
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