2017/18 remained a difficult year domestically despite some momentum gained when President Ramaphosa took over as the ruling party’s President in December last 2017 and when he took occupation of the Union Building early in 2018. As a sector relying on government’s ability to spend, business and consumers as well as the construction sector have been significantly affected by the country’s sluggish economic growth.
According to the Bureau for Economic Research‘s quarterly analysis of building and construction activity second quarter report, building confidence, as measured by the FNB/BER Building Confidence Index, fell to 29 in 2018Q2. This is said to be largely due to significantly lower confidence among hardware retailers and manufacturers of building materials where confidence fell to 45 and 32 index points respectively. Lack of new construction demand has also been reported to be a concern, particularly in civil construction.
Other than economic challenges the industry has been bedevilled by site stoppages and intimidation, particularly in KwaZulu-Natal, some parts of Gauteng and Mpumalanga, as well as in other provinces. These acts manifests themselves as actions of fighting economic exclusion by concerned local business forums. Yes, acts of challenging the status quo and skewed and uncompetitive business practices are an important part of our democracy. Untransformed companies should not have place in any country that is still battling to heal from the effects of a non-inclusive economy.
However, criminal acts, including intimidation, should not be tolerated in a civilized society where the rule of law must be upheld in any given situation. As Master Builders South Africa, we are on record supporting all efforts and proposals that are developmental, transformative and necessary for our sector – and we remain consistent in our position regarding these matters.
Non-payment and late-payment of contractors by the state has been one of the major concerns in the construction industry. In January 2018, Master Builders South Africa engaged with National Treasury and we were encouraged by the government’s commitment to deal with the problem. We have since received positive feedback from some members who followed the agreed process to escalate issues of their long outstanding payment. The function has since been transferred to the Department of Planning, Monitoring and Evaluation and we are in the process of engaging with this Department on behalf of our members.
As a federation of employers in the building industry, we are extremely concerned about the ongoing collapse of construction companies. In 2017/18 the industry witnessed liquidations of a number of high capacity construction firm. We also witnessed some large construction firms applying for voluntary business rescue. This is certainly detrimental to our industry and the country as a whole. South Africa cannot afford to lose its infrastructure development capacity and skills that have taken so many years to build. Whilst we are finding ways of responding to all these challenges, small and medium sized firms must innovate and create space for themselves in these very challenging times in order to build capacity and survive.
During the 2017/18 financial year our interaction with government, industry regulatory bodies and other key industry stakeholders has been good. We committed to increase our interaction with all industry stakeholders in the ensuing year for greater impact and collaboration.
We would like to thank all firms and companies that continue to support us in all our endeavours. We thank all businesses and stakeholders for their unwavering support of our annual Congress which provides us with the opportunity to meet with all industry role players and most importantly, to share views and ideas necessary for the betterment of our industry and our nation.
Times are tougher, but we have to keep moving forward, not only for ourselves, but for the next generation who will in turn take custody of our beautiful country.
As we celebrate 100 years of Madiba, it would be remiss of me to conclude any speech or a report without quoting some of his most famous, wise and motivating words. The following sums it up well for me:
“I am fundamentally an optimist. Whether that comes from nature or nurture, I cannot say. Part of being optimistic is keeping one’s head pointed toward the sun, one’s feet moving forward. There were many dark moments when my faith in humanity was sorely tested, but I would not and could not give myself up to despair. That way lays defeat and death.”
Executive Director, Master Builders South Africa