We believe that the 0.8% economic growth rate for 2018 as a whole was likely “property negative”, sustaining negative real growth in property values and total returns in single digits.

Total income for SA's tourist accommodation industry rises by 10.5% in nominal terms in November 2013.

Thursday, 14 August 2003 02:00

Lack of skills hits building sector.

WHILE construction companies have hit hard times mainly because of the rand's strength this year, there is growing concern that the industry will not be able to meet demand in a few years. 

Construction Industry"The industry will need to double its capacity in about 10 years if government meets its 5% to 6% gross domestic product growth target," says the Construction Industry Development Board's CEO, Spencer Hodgson. 

The board is a statutory body aimed at enhancing the sector.

Economic growth at these levels would require construction growing significantly faster than 5% or 6% a year, says Hodgson.

The problem is that the construction industry is not retaining or attracting skills, he says. 

The board's deputy chairman Pepi Silinga has said there was "an urgent need to address the distressing capacity deficit" in the industry.

The small and shrinking portion of matriculants that have mathematics and science as subjects are opting for "lifestyle" careers, and no longer the construction sector, Hodgson says.

Henk Langenhoven, head of the South African Federation of Civil Engineering Contractors, agreed that the decline in SA's output of construction skills was worrying.

However, Langenhoven said that concern over industry's ability to cope with growth was invalid. He could not foresee economic growth of 5% to 6% materialising.

"This is because we need more gross fixed capital investment before we can reach these economic growth levels," said Langenhoven. "And the public sector does not have the capacity to spend this kind of money," he said.

He suggested the concern should rather be greater about government's inability to deliver.

He said several companies in the sector were, in fact, now considering cutting skilled jobs such as engineers, because the industry was in a poor state.

The strong rand, which had taken the steam out of mining projects, together with lack of government spending were the main culprits, said Langenhoven.

"There is virtually nothing coming out of the government departments at the moment," he said.

Langenhoven said there was a massive lag between the announcement of the budget in February and actual spending, which was not yet taking place.

The proposed Skuifraam dam in the water-short Western Cape illustrated government's inability to deliver projects, said Langenhoven. "This project has been on the cards for eight to nine years," he said.

Meanwhile, government's concern over the ability of the construction industry as the creators of infrastructure to cope with future demand, has prompted it to investigate several initiatives.

A construction industry week has been mooted by the public works department to raise the profile of the sector and awareness around it.

The concern over capacity is also one of the issues on a draft agenda for a construction sector summit expected to take place early next year.

Black empowerment and possibly an empowerment charter for the sector will be discussed.       

 

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