Desperate Productivity Increase in the Building Industry Required to Sustain the Construction Sector
South Africa has suffered one of the worst declines in its history of economic activity, which unveiled itself particularly during the first few months of 2019. Two of the biggest sectors contributing to this decline are the construction and mining industries. Although the two industries are two separate industries, both play an integral role in supporting each other.
The construction industry, in particular, has hit a rough patch, with some of the industry’s household names in construction recently being liquidated, declared bankruptcy and placed under immediate business rescue to prevent them from losing all of their assets, as well as having to retrench their employees.
2019 – The First Quarter’s Economic Activity Data Presents a Discouraging Reality
Recently, data released in May has suggested a negative status for the construction industry, which contributed to the unemployment rate in the country resulting in 142,000 jobs being lost within six months. This data presents the last quarter of 2018 and the first quarter of 2019.
Allen Bodill, the Executive Director of Master Builders’ Association in the Western Cape (MBAWC), released a statement aimed towards the construction industry, encouraging growth, instead of focusing on negative factors influencing the construction industry.
As it stands, the only way to improve the industry and impact growth is for the government and private sector to step in. They are the only two bodies in power to implement change.
In other news, investor confidence in the South African construction industry has decreased, due to a lack of certainty in the industry, especially in the economy. Since many leading industry players are now struggling to keep their construction firms afloat, there is also a lack of new construction businesses being created, as motivation has been temporarily lost in the industry.
At the previous State of the Nation Address (SONA), President Cyril Ramaphosa stated that the government will be allocating up to R100 billion for the improvement of the construction industry, which is yet to realize.
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