Construction World August 2022

MARKETPLACE

CAN THE CONSTRUCTION SECTOR BE REBUILT?

Significant business disruptions, a constrained economic climate and a decline in the resultant revenue exacerbated by the COVID-19 pandemic are some of the challenges faced by the South African built environment.

K ey concerns are the decline in large build opportunities and investment in infrastructure, as well as the significant shortage of construction projects. These impacts have resulted in the need for the built environment to address both short-term and long-term business challenges as it is faced with a new national environment. According to the 2021 PPS Graduate Professional Index (GPI) results released in late May 2022, it is evident that many graduate professionals in the built environment sector are continuing to feel the rippling effects of the pandemic. In November 2021, the financial service provider PPS engaged with 3 264 of its members – all graduate professionals – across various industries to gauge their confidence in the future of their profession and understand their views on issues they feel are influencing their careers and their livelihoods. While the pandemic placed a serious damper on economic activity in the country, 59% of the respondents felt positive and confident about the future of their professions. However, 48% of the respondents operating in the built environment felt less confident about prospects in their industry. “For many businesses in the built environment already teetering on the brink of having to close their businesses, the pandemic has been a crisis of unprecedented scale, the remnants of which are still being felt,” says Ayanda Seboni, Group Executive of Marketing and Stakeholder Relations at PPS. “The slowdown experienced by the built environment was severe as activities grounded to a halt and contractors were faced with a new variety of unknowns relating to occupational health and safety in addition to the uncertainties of when and how the economy would recover,” Seboni explains. The impact of the pandemic has been felt by all sectors, with 63% of respondents stating that COVID-19 negatively affected their careers and 47% stating that during the pandemic, business opportunities in their sector dried up significantly. These trying circumstances have made professionals in the built environment more financially

conscious, with 90% reportedly being more astute in their approach to money matters, such as financial planning and investing. Notwithstanding this savvy savings behaviour, the cost of living for these graduate professionals increased, with many having to pay more to maintain the same lifestyle. While South Africa’s inflation rate has been quite stable for the past few years – levelling off between 3,3% (in 2020) and 4,1% (in 2019) – 93% of the respondents stated that the historical inflation rate was much higher than the real rate experienced when paying for goods and services. “With the onset of South Africa’s national lockdown, the government diverted infrastructure spending to alleviate the country's economic and social crisis, cutting traditional expenditure by 80%. While necessary, this had dire consequences for all sectors, especially the built environment, and now the sector is faced with the arduous task of trying to recover and rebuild to get back to operational sustainability,” says Seboni. The road to recovery is long, and while the government has committed to using infrastructure projects to drive post COVID-19 economic recovery, 71% of skilled professionals do not believe there are enough building and construction projects in South Africa to help the sector rebuild and recover,” says Seboni. The South African Economic Reconstruction and Recovery Plan is aimed at stimulating equitable and inclusive growth. “However, 63% of skilled professionals stated that they lack faith in the government to drive this plan and unlock greater job creation and faster economic growth,” concludes Seboni. • 71% of skilled professionals do not believe there are enough built environment projects in South Africa. • 63% of skilled professionals believe there is a decline in large build opportunities and infrastructure investment. • 63% of skilled professionals lack faith in the government to drive the South African Economic Reconstruction and Recovery Plan and unlock greater job creation and faster economic growth. 

8 CONSTRUCTION WORLD AUGUST 2022