South Africa’s construction industry is growing stronger and seems composed to support the country’s infrastructure development.

Over the last 3 years South Africa’s construction industry has strictly embraced major and long term growth. Despite a host of financial challenges in the past three years, South Africa’s construction industry is growing stronger as individual companies are performing well and public infrastructure commitments are higher. It was disclosed that capital expenditure by the public sector institutions increased by 11.7% since 2011, with total expenditure amounting to US$18bn. New construction work increased only by 3.5%, whereas plant, machinery and equipment purchase increased by 55%.

In addition to the increase in construction projects, average salaries within South Africa’s construction industry have increased compared to other sectors. Such increases are indicative of the skills shortage and efforts by the construction industry to retain key resources in anticipation of the potential upswing.

Companies operating within South Africa’s construction industry have agreed that there are certain factors to consider while attempting stabilising the industry. Among these factors, integration of risk and performance management to help anticipate negative events is vital to construction companies.

Common risks have been identified as health, safety, and environmental sustainability, compliance with laws, growth and expansion. In addition, movement of foreign exchange too has an impact on the construction segment, as they dictate the timelines of projects.

Transforming the construction industry is seen as a business imperative. One can see skills development and resulting employment equity as one of the biggest challenges currently facing South Africa’s Construction Industry. The new landscape requires improved governance, adequate risk management practices, improved transparency and disclosure to the board, audit committee and stakeholders in respect of taxes.


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