Construction World August 2017

COMMENT

Craig Uren, the COO of Isuzu Motors South Africa (formerly Isuzu Trucks) updates the media, on a quarterly basis, on issues affecting the brand and how it is doing in the marketplace.

What he had to say recently is also relevant for the construction industry as the issues affecting trucking are, by and large, also the issues affecting construction. The issues affecting economics Uren says there are various international and national issues that indirectly (and directly) affect the South African economy. With ‘affect’ I refer to how South African industry is then approached by investors, what motivates them or scares them away. It also refers to how internal events negatively or positively impact the South African economy. Internationally the most dramatic events of the recent past have been Brexit, the election of Emmanuel Macron as French president, the US’s dramatic exit from the Paris climate agreement, Trump – who may have started off with bravado, but who is now increasingly seen as an irritation in the political, economic and environmental sphere and to a lesser extent Kim Jong-Un. As South Africa is geographically removed from most of these macro-world events, it is more affected by internal events – events that often put even more stress on an already struggling economy. The major ones include the cabinet reshuffle, Thuli Madonsela’s departure and her replacement, Busisiwe Mkhwebane, the 2018 ANC election and obviously Zumanomics. The latter has proven to have a direct bearing on how the local currency performs and how potential investors view the country. All these, and others, contribute to an unemployment rate of above 27%. It seems unlikely that this will decrease any time soon because the political landscape directly influences the economic landscape and vice versa.

BRIDGE OVER TROUBLED WATER: infrastructural development can be the saving grace for a country’s economy in times of stress.

These issues in construction Relating this situation to construction: in times of downward trends, one way of alleviation economic strain on a country is massive infrastructural investment. Although there has been talk of significant government investment in infrastructure, projects awarded under this seem to be a mere trickle of what could have been active projects by now. Therefore, depending on what report about the construction industry one studies, the South African industry is either on a downward trend or merely ticking over. The current situation does not bode well for the unemploy- ment rate. Either companies will keep the status quo, or rightsize even further. A flat pattern? Uren illustrated that the truck sales for the first six months of 2017 are much the same as that of 2016 – in essence flat. If industry does not buy trucks, then industry as a whole is stag- nant or decreasing. As issues affecting the economy cannot be predicted and because there is no World Cup or another dramat- ic event on the horizon, the economy is in a flat cycle. How and when this will change, cannot be predicted … sadly.

Wilhelm du Plessis Editor

@ConstWorldSA

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EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & DESIGN Lesley Testa CIRCULATION Karen Smith

PUBLISHER Karen Grant

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The views expressed in this publication are not necessarily those of the editor or the publisher.

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CONSTRUCTION WORLD AUGUST 2017