Construction World November 2016

CONSTRUCTION CONFIDENCE ABOVE 50 The FNB/BER Civil Confidence

in construction activity. According to Statistics South Africa (Stats SA), growth in the real value of construction works slowed to 0,2% year-on-year in 2016Q2, from 4,6% in 2016Q1. On a quarterly basis, construction work was up 8%. “The annual result was somewhat weaker than what last quarter’s survey results suggested. Nonetheless, growth may continue in 2016Q3. However, a robust quarterly recovery as seen in 2016Q2 is unlikely,’ said Muscat. Pressure on public sector capital expenditure due to fiscal concerns as well as mining companies’ reluctance to embark on costly capacity expansion projects will weigh on construction activity over the medium term. While growth in construction activity remained under pressure, respondents noted that the lack of demand for new work is becoming less of a business constraint. “This possibly reflects some work coming through, likely from the renewable energy sector. However, this may not be enough to support the entire industry”, added Muscat. In conclusion: While less keen tendering price competition lifted confidence in 3Q2016,

the subdued growth in construction activity re- mains a concern. A marked slowdown was registered in the growth in construc- tion works in 2Q2016. The survey suggests that similar low growth can be expected for 3Q2016.

Index gained 11 points to register a level of 52 in 3Q2016. This means that confidence has gained 24 points in total since 1Q2016.

Jason Muscat, senior in- dustry analyst at FNB.

The current level of the index indicates that slightly more than half of respon- dents are satisfied with prevailing busi-

>

About the survey The FNB/BER civil confidence index can vary between a maximum of 100 (which indicates that all respondents were satisfied with prevailing business conditions) and a minimum of zero (indicating that all respondents were dissatisfied). A level of 50 indicates that the respondents are equally divided between those satisfied and dissatisfied. The fieldwork of the second quarter survey was conducted between 25 July and 29 August 2016. In a circle (or a design element that stands out) • After increasing by 13 points in 2Q2016, the FNB/BER Civil Confidence Index rose by a further 11 points to 52 in 3Q2016. • Confidence was lifted by a notable improvement in overall profitability due to less keen tendering price competition and continued growth in construction activity. • Looking ahead, construction activity is set to remain under pressure although order books have improved.

ness conditions. The higher confidence was well supported by the underlying data, especially tendering price competition. “The less keen tendering competi- tion lifted profitability somewhat. However, it is important to note that tendering competition can ease due to an increase in the number of tenders or a fall in the number of firms tendering or a combination of the two”, remarked Jason Muscat, senior industry analyst at FNB. Confidence was higher despite soft growth

Over the next few months, the executive committee will evolve and the next generation of leaders will step forward in order to take the organisation into the future. Tommy Strydom, who has been appointed as the Group’s new operations director, says the organisation’s strategic imperative is to build stronger relations within the markets where it operates and enter new markets. “Emerging trends are changing the face of the construction industry on the African continent more than anywhere else. Therefore, we are repositioning the company with re-engineered thinking for the long-term growth trajectory expected for the continent.” he said. John Hamilton, previously the Group’s chief operating officer will fulfil the role of group managing director. “With these new appointments, the organisation is set to become one of Africa’s preferred construction partners,” said Frans Pienaar, chairman of the group. To achieve this, the organisation will focus on employee devel- opment through their training and wellness programmes and continue the uncompromising application of their motto QCD, Quality – Do it right the first time, Control – control every last little detail to ensure we do it right the first time and Discipline – the discipline to continuously do this every time. Inyatsi Construction Group Holdings last week announced its succession planning strategy and plans to target bigger markets and increase turnover from the current R1,5-billion to more than double in the next two to three years. Frans Pienaar (chairman, Inyatsi Construction Group Holdings) and Tom- my Strydom (group operations Director, Inyatsi Construction) shaking hands to new growth. > SUCCESSION PLANNING AND TRANSFORMATION

5

Delivered between June 2014 and August 2015, the complex gas pipeline and facilities project, spanning a distance of 300 km, was completed in a challenging, densely populated environment, ahead of a demanding one-year schedule and with zero lost time injuries. On accepting the award, project director Rod Blackwell thanked customer PTT Public Company Limited, construction partner CCC and his project team and said: “The collaborative relationship formed between McConnell Dowell and PTT was the foundation for the success of the project. It allowed us to align our objectives, present as a seamless team to the local community, and address every challenge encountered quickly and effectively.” He added: “Our project team was outstanding. Along with our partner CCC, we successfully managed a peak workforce of over 2 800 people spread over more than 50 concurrent worksites to deliver the project safely and at the highest quality standards. The results showcase the skill, commit- ment and dedication of all involved. Thank you to everyone on the team.” McConnell Dowell, in a joint venture with CCC, also received the runner-up prize for the 520 km long Australia Pacific LNG pipeline project, showcasing the company’s broad geographic footprint and resource capacity for delivering major, cross-country pipeline projects. > Contractors Association (IPLOCA) Awards on 16 September 2016 in Paris, France. McConnell Dowell’s Fourth Transmission Pipeline Phase II project in Thailand beat outstanding projects from around the world to secure this award. INTERNATIONAL AWARD FOR MCCONNELL DOWELL McConnell Dowell, a subsidiary of Aveng Limited, was awarded top honours for Excellence in Project Execution at the International Pipe Line & Offshore

CONSTRUCTION WORLD NOVEMBER 2016