The State of the Construction Industry high on the agenda at Master Builders Congress 2017

The State of the Construction Industry high on the agenda at Master Builders Congress 2017

 

Economic transformation in the South African construction sector and the impact of ratings downgrades on the development and future of the industry, are topics that will be discussed at the annual Master Builders South Africa (MBSA) Congress, taking place on 11 and 12 September 2017 at the Century City Conference Centre in Cape Town.

DRAFT PROGRAMME – MASTER BUILDERS CONGRESS 2017 

The Congress, now in its 112th year, has become an important platform for addressing issues and opportunities within the South African building and construction industry with input from government, building industry leaders, economists and other relevant stakeholders. Under this year’s theme of Building South Africa Together, speakers from these and other sectors will be exploring matters currently impacting the industry.

 

Kicking off the Congress will be a representative from the Ministry of Economic Development, who will discuss the status of the National Infrastructure Plan along with its implications and opportunities for local contractors.

 

This will be followed by what is bound to be a lively panel discussion on The State of the Construction Industry in South Africa, with panellists including MBSA President, Bafikile Bonke Simelane; CEO of the Construction Sector Charter Council, Thabo Masombuka; the Competition Commissioner, Tembinkosi Bonakele and the General Secretary of the Black Business Council in the Built Environment, Gregory Mofokeng. The conversation will consider if the new Construction Sector Codes adequately address transformation gaps in the sector, as well as the effects of anti-competitive behaviour, amongst other issues.

 

The future of the industry will be unpacked throughout the course of the Congress by speakers such as Craig Lemboe, Senior Economist at the Bureau for Economic Research, who will be unveiling what’s in store for the industry and country going forward in his talk on South Africa’s Economic Outlook. The Deputy Minister of Trade and Industry, Bulelani Magwanishe, will also be exploring avenues for future industry growth in his address on Regional Integration for African Cooperation and Development.

 

The Deputy Minister will be participating in a panel discussion on Industry Opportunities together with Chairman of WBHO Construction, Mike Wylie; CEO of the South African Forum of Civil Engineering Contractors, Webster Mfebe; MBSA Executive Director, Roy Mnisi; CEO of the Built Environment Professions Export Council, Con Korsten and President of the National African Federation for the Building Industry, Aubrey Tshalata. They will be exploring construction opportunities in the region and the roles of financing institutions and voluntary associations in the development of the construction industry and increasing SMME market access.

 

A key feature of every Congress are the technical breakaway sessions which enable teams of experts from various aspects of the industry to debate the issues of Construction Occupational Health and Safety (OH&S)Skills Development and Regulatory, Contractual and Legal Matters in the Construction Industry. This year’s participants will include Chief OH&S Inspector at the Department of Labour, Tibor Szana; Chief Director of Artisan Development at the Department of Higher Education, David Mabusela; and Programme Manager at the Construction Industry Development Board, Dr Rodney Milford.

 

Another regular highlight is the exhibition which coincides with the Congress and showcases the latest developments in and services available to the industry. This year, for the first time ever, entry will be free of charge to all contractors in and around the Western Cape.

 

MBSA Executive Director Roy Mnisi says: “I invite all members of the building and construction industry, suppliers and service providers to join us at this year’s Congress to learn about how we can all play a part in building South Africa together.”

 

To register, or for more information about the Congress, visitwww.congress.masterbuilders.org. To keep up to date with the latest happenings, follow the Congress’ Facebook and Twitter pages.

DRAFT PROGRAMME – MASTER BUILDERS CONGRESS 2017

Light steel frame training course for building contractors 18 to 23 September in Cape Town

The Southern African Light Steel Frame Building Association (SASFA) will be presenting its 6-day training course for building contractors from 18 to 23 September 2017 in Cape Town.

Click here for more detail, and the registration form.

There is limited space available on the course (we can only accept 20 registrations) – book now to ensure your place!

Please forward this invitation to anyone you believe may be interested in the course – it is essential for the growth of this industry that all role players be properly trained.

MBA Free State celebrates 65 years

MBA Free State celebrates 65 years

By Nico de Bruyn, Construction Health and Safety Manager, Master Builders Association – Free State

The Master Builders and Allied Trades Association – Free State (MBA FS) celebrates its 65th anniversary year. The MBA FS was founded in 1952 and is an Employers’ Organization in terms of the Labour Relations Act (LRA).

Our objective is to ensure our members maintain a high reputation in building and construction standards and, through the Health and Safety Competition, to ensure a high standard of Health and Safety construction sites with the help and continued support of the Federated Employers Mutual Assurance Company (FEM).

We would like to welcome Charlene Harrison to our team. Charlene will run the office administration and communication and we wish her a rewarding and successful career at MBA FS.

Farewell Ms. Pugh

The MBA FS extends heartfelt thanks to thank Mrs. Thelma Pugh for her support towards the Master Builders Association Free State in her years of service at FEM. We are grateful for the strong relationship we had with Mrs Thelma Pugh through FEM and other MBA’s. MBA FS wishes her well on her retirement.

The MBA FS would also like to welcome the new Managing Director at FEM, Mrs. Ndivhuwo Manyonga and wish her well in her new position at FEM.

2017 Regional Safety Competition Free State

Hani Park Primary School, Welkom

Health and Safety remains a high big priority among our members and the MBA FS thanks its members for their commitment and participation in the Regional Safety Competition.

MBA FS participants in the 2017 Regional Safety Competition:

  • Cherangani Trade and Invest 50 (Pty) Ltd t/a 3 Brick

  • Steeledale (Pty) Ltd

  • PERI Formwork & Scaffolding Engineering

  • Waco Africa (Pty) Ltd t/a Formscaff

  • Mofomo Construction CC

  • Pro-Care Contracting (Pty) Ltd

  • Karpah Construction CC

  • Goldfields Development (Pty) Ltd

  • Goldfields Development (Pty) Ltd / Lesole Agency Joint Venture

Of these the following three entries who performed extremely well went into the National Safety Competition:

Category: R25m to R75m

  • Karpah Construction CC – Hani Park Primary School – Thabong, Welkom

Category: Manufacturing

  • Steeledale (Pty) Ltd – Bloemfontein

Category: Allied Trades

  • Waco Africa (Pty) Ltd t/a Formscaff – Bloemfontein

SIDEBAR

PROJECT OVERVIEW

Hani Park Primary School, Welkom

Main Contractor: Karpah Construction

Client: Department of Public Works and Infrastructure, Free State

User client: Department of Education, Free State

Project manager: Johan Helm Architects, Welkom

Project description: construction of new local community primary school (turn key)

Site hand-over date: 15 April 2016

Expected completion date: 30 November 2017

Project value: R40 million

The new Hani Park Primary School consists of four classroom blocks totalling 27 classrooms, as well as additional structures for two computer laboratories, administration building, hall and gate house.

The majority of the labour force and sub-contractors (labour only) on this project has been sourced from the local community in collaboration with the ward councillor as well as the community liaison officer (CLO).

This project was met with a number of challenges at the outset, situations such as raw effluent flowing onto the project site, unplanned and unexpectedly high rainfall season are two instances of this. The unforeseen rainfall pattern on this project caused a delay of some 21 working days while clean up and dry up operations took place.

The expected population in terms of learners for the Hani Park Primary School is expected to be in the vicinity of 1 080.

Is business really booming in the construction industry?

Is business really booming in the construction industry?

Bafikile Bonke Simelane

After last month’s flurry of distressing news, analysis, decreases in the business confidence index, unemployment statistics and macro-economic data on the country’s recession, GDP contraction, sovereign credit ratings, currency volatility and mounting job losses; it was somewhat heartening to read a Moneyweb article entitled “Business is booming in Building and Construction”.

This is despite decreases reported for non-residential buildings and construction works as indicated by the sharp decline in the FNB-BER Building Confidence Index. According to said article “Companies in the construction industry should be able to make a decent return for shareholders, provided they position themselves correctly on product quality, price and service delivery, says Andries van Heerden, CEO of listed aggregate supplier Afrimat.”

Afrimat and well-known economist Dr Roelof Botha joined forces to develop the Afrimat Construction Index (ACI), which measures activity in the sector. The ACI is calculated from nine different constituent indicators: the volume of building materials produced; the sales value of building materials; the value of buildings completed within larger municipalities; the value of building plans passed by larger municipalities; the FNB/BER building confidence index; the FNB/BER civil construction index; retail trade sales of hardware, paint and glass; formal employment in construction; and the value added by the construction sector.

In the fourth quarter of last year the ACI was at a two-year high and since the third quarter of 2010 it has expanded by 22.7%, more than double the growth rate of the economy as a whole (in real terms), says Botha. SA Reserve Bank data that shows substantial growth in investment in construction works over the last five years supports this, says Medium-Term Forecasting Associates Dr Johan Snyman.

Latest data from the South African Chamber of Commerce and Industry’s (SACCI) Business Confidence Index (BCI) is also indicating resilience even though confidence remains under pressure due to political and economic policy uncertainty for these turbulent recessionary times we find ourselves in as a country.

The International Monetary Fund (IMF) also weighed in highlighting the prospect of protracted economic policy uncertainty, together with a continued deterioration in perceptions over the quality of governance, as key risks to South Africa’s growth outlook. The IMF still expects South Africa to grow by 1% in 2017, despite the fact that the country descended into its first recession since 2009 in the first few months of 2017. It expects the economy to expand by 1.2% in 2018. This is not nearly enough to make a meaningful difference and have the desired positive impact. We need game-changers and we need them fast.

The foregoing underscores the need for South Africa to have an inclusive and collective ‘war room’ approach on what immediate action and measures need to be taken by all role players as interested and affected parties to mitigate and ultimately reverse the negative concomitant impact of the country’s low economic growth and low employment creation to stem the tide of rampant job losses which serves to deepen poverty and inequality. This echoes the sentiments echoed by National Treasury as reported in last month’s edition. The situation we find ourselves in needs to be treated with the utmost urgency.

We trust that the Finance Minister will keep his promise and his statement bears repeating in this edition: “We will implement steps to get the economy growing at about 6%.” “We want to get everyone focused on boosting the economy … so that the low growth doesn’t become a vicious cycle.”

We hope the Minister and National Treasury’s Action Plan will inspire much-needed confidence to galvanize the nation around one common goal of Building South Africa. MBSA remains committed to this ideal and stands ready to mobilize its members around a common vision for the future of SA Incorporated.

Emerging Contractors Networking Conference and Exhibition – 2017

Siya Mdlalose (MC), Darren Malay – PPC Marketing Assistant and Gerald Ndlovu – Black Suppliers Managing Director

Emerging Contractors Networking Conference and Exhibition – 2017

The partnership between PPC and Black Suppliers brought to the heart of Soweto the Emerging Contractors Networking Conference and Exhibition, which took place in July at Soweto Theatre in Jabulani.

The conference hosted business owners, community members and corporate sponsors. The keynote address was delivered by Executive Mayor, Herman Mashaba, who expounded the importance of the construction industry as being one of the key industries for job creation and emphasised the importance of the private sector in ensuring the success of this industry.

The main objective of the Emerging Contractors Conference was to assist entrepreneurs with information on how to improve their businesses; how to identify and pitch for new business opportunities; equip them with the right skills; improve existing skills; and to provide a networking platform between start-ups, big corporates and service providers.

In addition the conference focused driving transformation in the construction industry and the development of small, medium and micro-sized enterprise (SMME) contractors. The conference also offered emerging SMME contractors unprecedented opportunities to find out about new projects opening for tender; learn about the latest available materials and technologies; develop soft and hard skills

.

The Emerging Contractors Conference was a platform that Black Suppliers in partnership with the other sponsors and stakeholders have created to assist in opening doors for up-and-coming contractors, exposing them to current industry scenarios and to listen to what their challenges and struggles are so that solutions can be found.

A BLAST FROM THE PAST – Official Opening of MBSA Congress 1967

A view of the main table at the official opening ceremony showing the President, Mr. Briggs, delivering his annual address. This year’s Congress venue was the Orient Beach Theatre in East London, which was gaily decorated for this major event in the calendar of the Building Industry.

Official Opening of 1967 Congress

DELEGATES AND GUESTS WELCOMED

The 62nd Congress of the National Federation of Building Trade Employers in South Africa was officially opened in East London by Mr. I. F. McLean, the Rhodesian Minister of Labour ans Social Welfare, and of Health, during the last week of October.

In welcoming the Minister to Congress, the President of the N.F.B.T.E., Mr. R. A. Briggs, said this task was “a very happy privilege” for him to perform.

“Those of you who have attended Congress in recent years may be aware of the fact that an exchange of representation on these occasions has enabled our respective Federations to gain a better insight into each other’s problems and thus to establish closer relations between ourselves and our immediate neighbours in the north”, Mr. Briggs said.

In his address Mr. McLean spoke on a number of topics, amongst which was the skills shortage: “It is an unfortunate fact that, with the economies on both sides of the Limpopo each now expanding, there is insufficient number of skilled workers in all sectors of industry to meet our joint needs. I think both countries have to accept that, with the world-wide shortage of skilled personnel, neither of us can expect to meet anything like the existing demand from immigration, although Rhodesia is now also experiencing a steady and favourable balance of immigration over emigration.”

Another speaker during the opening function was, Mr. H. N. Odd, President of the East London M.B.A., who his Association had been privileged to play host to the 1967 annual congress.

“As an association which, according to history, was founded in 1903, our association played its part in the creation of the National Federation in Durban on March 23rd, 1904. We have always been extremely mindful of the very important part played by Federation, not only in so far as the Building Industry is concerned, but in the general affairs and building of this country and its nation. In this, we as an association have tried to play our part.”

In reply to Mr. Dodd, Mr. Briggs said:

“The modesty of the East London builders has never permitted them to classify themselves as one of the larger groups. This, notwithstanding, we are all convinced that East London is equipped to play an important part in our organisation and I would like to avail myself of this opportunity also to thank your association for what it has done in the past. Not only to further our national interests as an Industry, but also to provide us with national leaders.

The Mayor of East London, Councillor David Lazarus, then addressed the delegates and guests by saying that East London has developed in recent years and hoped to develop further in the years ahead.

“A recent development which merited applause and congratulation was the recent publication of a Handbook on Careers in the Building Industry, which was the first book of its kind to be produced for use by vocational guidance officers in South African schools.

The official opening ceremony was completed by Mr. T. Pattullo (a past President of the N.F.B.T.E.,) thanking Mr. Briggs for his year of office.

Association delegations represented at this year’s Congress were as follows:

President: R. A. Briggs

National Vice-Presidents: P. J. van Twisk and Mr. Lipshitz.

Past Presidents: J. C. Bitcon (Witwatersrand); J. A. Barrow (Witwatersrand); T. Pattullo (Cape Peninsula); H. McCarthy (Cape Peninsula); J. A. Reardon (Durban).

Bloemfontein: T. E. Fischer; M. H. J. Moffett, A. P. Porter and P. E. Nussey (Secretary).

Boland: S. F. Beer and C. B. Hugo

Cape Peninsula: D. Allan, G. Brice, J. A. Butler, F. W. Buckland, C. H. de Jager, A. G. Martin, M. Michaels, J. M. Schep and H. C. Webster (Secretary).

 

A section of the large crowd of delegates, their wives and guests who attended the official opening of the 1967 Annual Congress. Mr. J. C. Bitcon, a past President of the N.F.B.T.E., is shown sitting at the end of the front row with Mrs. Bitcon on his right.

CIDB survey reflects improved sentiment for Grades 3 & 4 civil contractors

CIDB survey reflects improved sentiment for Grades 3 & 4 civil contractors

After a largely flat 2016 and a disappointing start to 2017, civil engineering confidence, as measured in the Construction Industry Development Board (CIDB) SME business conditions survey, picked up by six index points to 43 during the second quarter of 2017 (2017Q2). Overall, pressure on business conditions was relieved somewhat as profitability found support from a combination of improved momentum in building activity and a less hostile tendering environment.

From a grades perspective, CIDB Grades 3 and 4 civil contractors were the only groups where sentiment improved. The confidence indicator for this group picked up by 11 index points to 44 in Q2, in line with key performance indicators. Ntando Skosana, Project Manager of Construction Industry Performance at the CIDB noted that: “The smaller grades were responsible for much of the overall improvement in the civil sector during the quarter. These contractors primarily participate in regional or municipal projects. With June representing the end of the municipal government financial year, it is likely that Grades 3 and 4 civil contractors benefited from the “rush” to spend on capex.”

General Building (GB):
Business confidence per grade
Source: BER, Stellenbosch University

Conversely for Grades 5 and 6 as well as Grades 7 and 8 civil contractors, sentiment deteriorated as activity and profitability remained under pressure.

Unlike the civil sector, general building confidence dropped to 42 index points in 2017Q2, from 46 previously. Discouragingly, the theme of pessimism was further entrenched during the quarter, against the backdrop of weaker construction activity. Skosana commented, “Contrary to last quarter, the somewhat more benign tendering environment for public sector building projects failed to support profitability this time round. In all, there was renewed pessimism in the building sector during Q2.”

For all three grades, confidence was below 50 index points. Whereas Grades 3 and 4 building contractors lost the most confidence to 41 index points, the level of confidence for Grades 7 and 8 contractors remained the lowest at 39 index points. Sentiment for Grades 5 and 6 contractors was barely changed at 43 index points.

Building confidence across all the four surveyed provinces was also downbeat and below 50 index points. “Whereas general builders in the Western Cape had held the fort of optimism over the past few quarters, this changed during the quarter. Nevertheless, building contractors in this province remain the least pessimistic,” Skosana explained. Western Cape building contractor confidence dropped significantly to 47 points (lowest level since 2014Q4), from 64 previously. Gauteng builders also lost confidence in line with poorer activity and profitability. Although sentiment improved in the Eastern Cape and KwaZulu-Natal, confidence levels remained depressed.

Conclusion

2017Q2 marked the eighth consecutive quarter where business confidence for the SME segment for both the building and civil engineering sectors read below the neutral 50-point mark. Encouragingly for civil contractors, there was broad-based improvement in the underlying performance indicators. Grades 3 and 4 contractors were solely responsible for this outcome, as they benefited from increased construction activity in line with the June financial year-end for municipal government. Unfortunately for the already ailing building sector, there was renewed pessimism during the quarter as weaker activity led to an even greater squeeze in profit margins.

The latest GDP growth report from Stats SA showed that an annualised contraction of 0.7% q-o-q during 2017Q1 led the SA economy into a technical recession. Looking ahead, this renewed weakness in the broader macroeconomic outlook bodes ill for both the civil and building sectors. During 2017Q2, insufficient demand for work was flagged as an impediment to business operations. This suggests that going forward, the pressure on construction and building work will persist.

Debunking the rate per square metre cost myth

Debunking the rate per square metre cost myth

A “cost per square metre rate” is a method of expressing building cost that should be used with extreme caution by both clients and contractors involved in the cost comparison and cost planning process.

So says former Association of South African Quantity Surveyor (ASAQS) President, Bert van den Heever.

Image: JobmailSA

There are a number of design variables which can adversely influence square metre rates, thereby giving a false impression of the cost of a building project and this can lead to serious problems for both clients and contractors. “You will not compare a Porsche to a Volkswagen on the basis of their cost per square metre, so why try and do it with buildings?” asks Van den Heever.

As a client, a generic cost per square metre rate doesn’t give you the detailed information that you need regarding finishes, fittings, services, site development costs and so on. There is a wide range of other building elements that also have an impact on costs and therefore quantity surveyors normally do elemental estimates to derive the square meter cost of a project. “An elemental estimate provides cost build-ups for elements such as the substructure, ground floor, external façade, roofs and enables the quantity surveyor to advise the client on aspects of cost at a very early stage” says Van den Heever.

It is important to note that less than 40% of a building’s cost is the structure itself, so the project is far from completed once the foundation has been laid, the walls have been built and the roof constructed. Smaller contractors who tender on a cost per square metre basis puts both themselves and their clients at risk.” says Van den Heever. We have, on numerous occasions, been approached by clients or their attorneys when building contracts turn sour, only to find that because there was no detailed breakdown of the costs, the project had run into trouble or come to a standstill due to overpayments on the structural elements,” says Van den Heever.

Why and how design variables play a role

A square metre rate is calculated by dividing the net cost of the building (excluding aspects such as site works and cost of land) by the gross square metres of the building or Gross Floor Area (GFA). Typically GFA can be defined as the total floor area inside the building envelope, including the external walls and excluding the roof.

As a general rule, the simpler the shape of a building, the lower the unit cost will be, but even this can be misleading as a square building of 10×10 m and a rectangular building of 25x4m have the same floor area but the rectangular building requires 45% more walling to enclose it. More intricate designs generally result in higher perimeter/floor area ratios – increasing excavation costs, drainage costs and a number of other construction related costs significantly,” explains Van den Heever.

Hiring a Quantity Surveyor early in the project, preferably not later than when sketch plans are being prepared by the architect, will put a client in the best possible position to achieve the look, finishes and final touches they require and still remain within their budget.

Both the client and the architect need to be fully aware of any additional costs or savings that may arise from shape, size, circulation space and a number of other variables in the design of a building. The services of a registered Quantity Surveyor can help them adopt an approach that will assist the client in achieving a suitable balance between cost, aesthetics and functional aspects,” concludes Van den Heever.

Students: start preparing now for Advanced Concrete Technology training

Students: start preparing now for Advanced Concrete Technology training

Potential candidates for The Concrete Institute’s next Advanced Concrete Technology (ACT) diploma course at the beginning of 2018 or even the following one in 2020 should immediately start their preparations for this formidable but highly respected concrete training.

That is the advice of John Roxburgh, lecturer at The Concrete Institute’s School of Concrete Technology (SCT), which presents the course every two years under the auspices of the Institute of Concrete Technology (ICT) in London.

Image: Bergmix

Roxburgh says the Advanced Concrete Technology diploma is the highest level of concrete technology training in Africa. It was originally proposed as means of formally recognising persons that had been active in the concrete and related industries for many years – and had substantial concrete technology knowledge and practical skills – for their experience in the form of a diploma. Such in-depth experience in the industry remains a prerequisite to acceptance for ACT studies and consequently the SCT has charted a route for potential, younger and less experienced, students to follow towards qualifying for ACT enrolment.

John Roxburgh, lecturer at The Concrete Institute’s School of Concrete Technology: “There are no short cuts to obtaining an Advanced Concrete Technology diploma, so start preparing now,” he urges potential students

South Africa urgently needs more qualified concrete technologists but be warned: there are no short cuts to gaining this ultimate diploma of competence. To be successful, requires a slow and steady maturation of concrete technology knowledge and hands on practice over a number of years,” Roxburgh cautions.

The SCT therefore recommends – and offers – a progressive approach to ACT training through selected courses that are of increasing technological content along with a more detailed study of various fields in concrete. Practical application of concrete technology is an essential component in concrete technology education. The SCT recommends that a prospective ACT candidate ensures that substantial time between courses is given to on-site application of the technology taught in their courses.

The School therefore encourages students to enrol at the SCT to complete the ICT’s Stage 2 (Concrete technology and construction: General principles) and Stage 3 (Concrete technology and construction: Practical applications). This will then ensure sufficient theoretical knowledge plus practical on site experience before considering enrolling for the formidable ACT programme,” Roxburgh adds.

To obtain the ACT diploma, passing two three-hour examinations, along with the acceptance of a satisfactory research project, must be achieved.

Over the past 26 years, a total of 79 candidates have successfully obtained an ACT diploma through the education provided by the SCT. For these graduates, the ACT diploma has opened up many doors within the concrete and concrete related industries, many of whom now occupy top leadership positions.

Roxburgh urges those interested in studying for an ACT diploma to contact the School of Concrete Technology as soon as possible to discuss an appropriate approach, based on individual needs and experience, towards successfully enrolling for and obtaining this prestigious diploma.

For more details, contact John Roxburgh on email johnr@theconcreteinstitute.org.za or phone 011 315 0300.