Remaining Resilient During Turbulent Times
Master Builders Association North (MBA North) re-elected its current office bearers for a second term at its Annual General Meeting held in Midrand in February: Musa Shangase – President; Wayne Albertyn – Vice President; Sello Mokawane – Second Vice President and Mandla Danisa – Treasurer. Jason Wilmot was retained as Immediate Past President.
The AGM was well attended by members, past office bearers and industry guests. MBA North Executive Director Mohau Mphomela acknowledged and welcomed Past Presidents and Honorary Life Members: Geoff Irons, Nico Maas, Neil Duncan, and Peter Buchel – as well as Past Presidents Hennie Bester, Manie Bosch and Peter Rϋde – and extended a special welcome to Webster Mfebe, Chief Executive Officer of the South African Forum of Civil Engineering Contractors (SAFCEC) and Herman Enoch, Marketing Manager of the Federated Employers Mutual (FEM).
MBA North Executive Director Mohau Mphomela
Honorary Treasurer of MBA North, Mandla Danisa detailed the Association’s financial statement which reflected a positive situation in all, with special reference to the continued
success of reducing the need for drawdowns from investment, resulting in a favourable financial situation. He also gave special thanks to FEM for their grants of R2.6 and R2.8 million, for which MBA North is very grateful.
“We have come through a year filled with challenges, both from our Association (MBA North), the Construction Industry and lack of economic growth in our country,” said Musa Shangase in his Presidential Address.
The MBA North AGM was well attended by members, past office bearers and industry guests
He noted that the Association had met its strategic goals for the period, namely to continue to build a team that will become a coherent group with well-developed goals; to reduce drawdowns to ensure that the MBA north is financially sustainable and to increase service delivery to the members.
“I am proud to say that the Association is on the correct path and is really coming out of its shell and is starting to engage more on industry matters important to its members and take the lead on matters affecting its members,” continued Shangase.
Musa Shangase, President, MBA North
On the construction industry front, demand for new construction work remained a constraint and activity growth is likely to remain under pressure in the near future. From CIDB grades perspective, confidence fell to historic lows of 25 and 15 for Grades 5 and 6, and Grades 7 and 8, respectively.
The Construction Industry Development Boards (CIDB’s) small and medium-sized enterprise (SME) business conditions survey has shown that civil contractor confidence fell by six index points to a historic low of 27 during the third quarter. Weakness in all the underlying indicators, especially construction activity, contributed to the drop in confidence.
Meanwhile, general building confidence has been trending downwards since early 2017. During the third quarter, business confidence shed three index points to 30.
On the Macro Economy, Shangase referred to the recent medium-term budget policy statement by Finance minister Tito Mboweni in his first major policy statement since returning to the cabinet, in which he halved the Treasury’s growth forecast and predicted a slower and later normalisation of the country’s debt profile, sparking a sell-off in the rand and causing bond markets to worry about the reaction of ratings agencies.
MBA North office bearers 2019: Back row: Executive Director – Mohau Mphomela; Jason Wilmot – Immediate Past President – Mandla Danisa – Treasurer.Seated: Sello Mokawane – Second Vice President; Musa Shangase – President; Wayne Albertyn – Vice President.
The budget in a nutshell
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Economic growth revised downwards from 1.5% to 0.7% for 2018.
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Consolidated budget deficit for 2018-2019 revised to 4% of GDP (from 3.6 %)
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After rising to 4.2%GDP in 2019-20, it is expected to stabilise at 4% in outer years.
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Gross debt to stabilise at 59.6% of GDP in 2023-24(February budget projection was 56.2% of GDP in 2021-22).
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Tax revenue for 2018-19 projected to fall R27.4 billion short of February estimate due to VAT refund backlog, underestimation of refund and slower corporate income tax collections.
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Expenditure ceiling to be maintained and set to grow at 1.5% in 2021-22.
The construction sector contributed negatively to the GDP with -2.7% in the third quarter of 2018, a trend that has prevailed since 2013 when the industry was in the headlines for all wrong reasons.
Shangase concluded by saying: “Trust is knowing that when a team member does push you, they are doing it because they care about team”
Dr Andrew Dittberner, Chief Investment Officer, Old Mutual
Guest speaker for the event was Dr Andrew Dittberner, Chief Investment Officer, Old Mutual, entitled Remaining Resilient During Turbulent Times. This dynamic presentation on an all too familiar topic had the audience riveted to their seats.
His array of powerful slides included a “Smartie Box” of investments; a “Wall of Worry” and a reveal of “Who has the Money”.
“The future is uncertain – but brighter”
“Who then does government turn to for investment – seeing their coffers are empty?” said Dr Dittberner. “To the South African Corporate sector – which is quietly sitting on large stockpiles of investment funds, and is essentially the primary future investors for our economy.”