“It used to be about 80% private business and about 20% government business, but this seems to have changed a lot more in favour of infrastructure spend by government,” says Jan Nell, MD of New Holland Construction.

“It seems that there has been a slowdown in private sector commercial construction, and our customers are telling us the same.”

The company is a distributor of earth-moving equipment and is a wholly owned subsidiary of the JSE listed Eqstra group.

He says the bulk of the government projects were budgeted for several years ago, many of them kickstarted by SA winning the World Cup bid in 2003.

“We have been quite fortunate as a country and as an industry in that these projects were planned long in advance. There is still a huge number of projects that are being planned beyond 2010, for as much as a10-year period, such as the building of new highways, including another highway around Johannesburg.”

Nell says SA is perfectly capable of sustaining this level of construction activity beyond 2010. Challenges will include the pricing of commodities such as gold, copper and diamonds and chrome, which is already making its effect felt, he says.

The skills shortage also remains an issue, with skilled technicians hard to find. A third challenge is obstacles being faced by company customers in accessing bank finance.

Nell is not in favour of importing skills to offset the skills shortage.

“With unemployment running at more than 23% I believe we should train people. We have the institutions to do this and a basic potential labour force that can be trained, which would be to the advantage of everybody.”

The Eqstra group has established a technical training academy near OR Tambo International Airport, that has more than 200 apprentices on its programme, says Nell.