4 Reasons Why the SA Construction Industry Outlook Looks Promising

4 Reasons Why the SA Construction Industry Outlook Looks Promising

The construction sector in South Africa faced an exceptionally challenging 2017, reaching 17-year lows; however, it remains one of the economic engines of the country.

The construction sector holds immense potential for advancement of the country’s general financial wellbeing, and according to this article the outlook is still promising here is why:

 1. National Treasury Infrastructure spend

National Treasury’s public-sector infrastructure spend – the greatest funder of construction activity in the country – continues to support economic expansion, diversification and competitiveness.

 2. Government efforts

Overall efforts by the government to stabilise the national economy are a good sign for key economic sectors such as construction.

The proposed budget of more than R800-billion allocated for public infrastructure development, including an additional 25% for power to the constrained current electricity grid, expansions in the public transportation sector and road upgrades and upcoming development of healthcare facilities and school projects, will ignite vital growth within the sector.

 3. Construction costs were also on the rise in 2017 especially

Construction costs are driven by the devaluation of the rand, the oil price, labour costs and labour unrest on site, as well as longer-term impacts including socioeconomic stresses in South Africa.

The policymakers were slow to respond; however, there has subsequently been an upbeat feel since President Cyril Ramaphosa’s appointment, and there is an anticipated air of opportunity from European, US and Australian investors who have shown a keen interest in investing into major construction firms in South Africa.

 4. Land reform talks

Regarding the land reform talks that could again impact on foreign investment, South Africa is in a holding pattern, and the outlooks are positive, but everyone is waiting to see what happens and whether policy certainty realises.


Uplifting the construction sector will involve the meaningful integration of physical and digital technologies (which is the basis of the Fourth Industrial Revolution) while adopting enabling technologies for operational and cost efficiencies as a key ingredient.

Empowering the youth to address the increasingly apparent skills gap within the sector must also be a priority. On-the-job training and other skills development opportunities need to become more widely available to the future leaders of our country.

Source: Engineering News


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