Modern Quarrying July-August 2016

AROUND THE INDUSTRY

Tough economic times ahead The Consulting Engineers South Africa (CESA) Bi-annual Economic and Capacity Survey for the period July to December 2015, just released, indicates that times are tough and getting tougher with industry confidence the lowest in 16 years. The report indicates that the consulting engineering industry will have to adapt to a low growth environment as the outlook for infrastructure spending is hampered by poor economic growth, lower than expected revenue by government, international economic instability and price volatility, and low private sector confidence. Three key factors continue to influence the global outlook: the gradual slowdown and rebalancing of the Chinese economy; lower prices for energy and other com- modities; and the gradual tightening of US monetary pol- icy. GDP growth in South Africa slowed to 0,6% q-q, from 0,7% q-q in the previous quarter. South African economic growth slowed from 1,5% y-y in 2014 to 1,3% in 2015. Growth was largely dragged down by a further contrac- tion in the agriculture sector while construction recorded marginal growth of 1,1% in the fourth quarter (from 0,5% in the previous quarter). According to CESA CEO Chris Campbell, “government needs a strong focus on the implementation of more of its strategic infrastructure projects as detailed in the National Development Plan in order to mitigate the decline in the economy and improve investor confidence.” He further reiterates that engineers in South Africa stand ready to partner with government in eradicating the leakage from the fiscus, “not only through water which does not reach domestic households, but also through poorly spent mon- ies or corrupt practices which have led to payment for poor quality and even non-existent services in the infrastructure space.” On industry challenges, Campbell says procurement is the biggest challenge. “A further challenge to industry is to find a way to standardise the procurement proce- dures applied by the different government departments. Procurement procedures should be standard for the coun- try, or at least for the specific tier of government,” he adds.

Visit www.cesa.co.za/node/21 for a copy of the CESA Bi-annual Economic and Capacity Survey.

CESA CEO Chris Campbell believes there are tough times ahead for the consulting engineering industry.

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MODERN QUARRYING

July - August 2016