The South African construction industry may have been in a slump, but Proudly SA companies and brands are turning things around.
Since the 2010 Soccer World Cup projects, the South African construction industry has been in a slump. In 2015, the sector was negatively impacted by labour unrest such as the metal-workers strike and while government spending on infrastructure needs will provide a much-anticipated boost, this still requires a lot of co-ordination among public and private companies in order to succeed.
According to the FNB/BER Civil Confidence Index, business confidence in the construction industry increased from 39 index points in the third quarter of 2015 to 42 index points in the fourth quarter. Last year, contractors were dissatisfied with business conditions because of a slowdown in construction activity.
Top challenges for the South African construction sector in 2016
• The struggling Rand: Project costs continue to rise as the unpredictability of the Rand hovers.
• Corruption: The reputation of the construction industry is undermined by collusive tendering in the public sector.
• Labour shortages: Skilled, experienced and trained artisans are in short supply in the construction industry.
PwC’s report entitled SA construction 3rd edition, which is based on the financial results of the leading heavy construction companies listed on the JSE, says that government’s spending on infrastructure is a positive sign.
“A good indicator of the industry’s performance would be infrastructure spend by the public sector. The South African Government’s ongoing National Development Plan and its continued commitment to public infrastructure investment of R810 billion (R847 billion 2014) over the next few years are still positive. However, the reduction in planned expenditure over the next three years highlights the tough economic environment experienced by the country and therefore by the heavy construction industry, which benefits from infrastructure development,” says PwC.
Besides government’s investment in local infrastructure projects, the construction industry can also look forward to a host of building projects in preparation for the Commonwealth Games in 2022. Local firms are also branching out to supply products and services to neighbouring African countries, where infrastructure is also in high demand.
Many key players in the local construction industry are taking matters into their own hands in order to boost knowledge, expertise and work opportunities in the country. Everyone from large contracting companies to flooring product manufacturers and suppliers have launched learnership programmes and skills development courses to pass on knowledge and skills to younger generations, contributing to higher quality workmanship in the industry. Many of these programmes are aimed at previously disadvantaged communities where access to high paying jobs has been hampered by the lack of qualified and experienced professionals.
One factor that continues to have an impact on the local design and flooring industry is clients who are increasingly looking to invest in local suppliers and people. As South African businesses continue to support local businesses, jobs are created, money is injected back into the local economy and our citizens are able to flourish.
From an environmental perspective, there are also many benefits to sourcing local products. Grahame Cruikshanks, managing executive for the residential sector at the Green Building Council South Africa says that it’s a way for clients and built environment professionals to reduce their carbon footprint and also for local communities to benefit.
“Sourcing construction materials and products from local suppliers provides a more reliable supply chain audit – for example, using local sustainably sourced wood instead of wood from a questionable overseas supplier. In addition, there can be benefits and points allocated to specifying local products in the materials section of our Green Star SA and EDGE rating tools,” says Grahame.
There are certain ways that local manufacturers can better market themselves to specifiers and designers.
“It is important to back up environmental claims with recognised standards. For example, they can refer to the standards used by Green Star SA. In addition, manufacturers could include sources of materials and manufacturing facilities and their locations in the manufacturer’s literature,” says Grahame.
Rosanne de Castro, a Senior Interior Designer at GLHI, says there are many benefits to sourcing local products for interior design projects.
“Not only are you assisting in job creation, but you also have more control over manufacturing and delivery times. The lead times involved in local product sourcing are often shorter than the lead times of sourcing international products. Another benefit is the on-site support that local suppliers offer. If you have any challenges, you can deal directly with the manufacturer,” says Rosanne.
On some commercial projects, interior designers are required to specify a certain percentage of local product in order to obtain Green Star SA Ratings.
“Many commercial buildings are pursuing Green Star SA Ratings, which means that we have to try harder to find local products. I have also noticed apprehension among project stakeholders to using some imported products because of uncertainty regarding the lead times involved. It can happen that products are stuck in customs or that your order falls in European Summer holidays, which can delay delivery. Another cost benefit of sourcing locally is you are able to cut out many of the middle men involved in international product sourcing,” says Rosanne.
Rosanne adds that there are ways that local manufacturers can grab the attention of local interior designers who need to specify products for commercial projects.
“Be reliable and offer high quality products,” says Rosanne. “Invest in product awareness because interior designers are often wary of specifying products that they aren’t familiar with. It’s important that local manufacturers also invest in research and development because nothing beats local innovation. If you are passionate and knowledgeable and willing to understand clients’ challenges, you will also be a step ahead of the rest.”
“In the last ten years, South Africa has gone from being a little country very rarely recognised for any design or exciting products, to being featured high on the list of hundreds of designers in various sectors, showing the world that we are creative, unique and talented and that we make some fantastic products. South Africa as a brand has grown exponentially and it’s so exciting to be part of it,” concludes Rosanne.