Construction World June 2021

COMMENT

According to the report “Construction in South Africa – Key Trends and Opportunities to 2025 (Q1 2021)” South Africa’s construction industry is expected to grow by 6,1% during the next decade after the 16,5% contraction during 2020 which was due to the COVID-19 pandemic.

T his contraction was because of the six-week lockdown that was imposed following the outbreak of COVID-19. Because of the impact on construction activity, the industry’s value-add fell by 21,6% year on year in Q3 of 2020. This was in addition to the massive contraction of 33,3% during Q2 of 2020 (according to Statistics South Africa). The industry was amongst those industries that were hardest hit by job losses, with 259 118 jobs lost in Q3 of 2020 (compared to Q3 of 2019). What goes down, must come up Cognisant of the vital role infrastructure development can play in economic recovery, the South African government, in June 2020, announced a 10 year infrastructure investment plan of some R2,3-trillion. This made provision for investments in agriculture, digital infrastructure, energy, housing, sanitation, transport and water. The investment is expected to create more than

1,8-million jobs over the next decade and is primarily from pledges made by the World Bank, African Development Bank (AfDB) and Development Bank of South Africa (DBSA). To coincide with this, the government rolled out its R1,1-trillion Economic Reconstruction and Recovery Plan. This ambitious plan has prioritised four things: infrastructure investments; expansion of the energy generation capacity; job creation to support livelihoods and industrial growth. Growth between 2022 and 2025 is expected to average only 0,2% – primarily due to the deterioration of the fiscal situation in the country. According to the report the government “expects the country's public debt to rise from 63,3% of GDP in 2020 to 81,8% by 2021, and further increase to 93,5% by 2026”. When looking at the numbers the severity of the impact of COVID-19 is clear: the total value of plans passed for building construction fell by 36,6% YoY in the first eleven months of 2020.

Best Projects 2021 Despite the contraction of the industry, the 20 th Best Projects Awards will be held in November. It is now awaiting entries. Projects that were completed last year or that are currently at the half way mark, can be entered. Despite trying times, there still is excellence and this must be recognised.

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CONSTRUCTION WORLD JUNE 2021