Strong and visionary leadership a tonic for industry doldrums

Strong and visionary leadership a tonic for industry doldrums

Last month we held our 112th Master Builders Congress in Cape Town under the theme of “Building South Africa”. Congress was well attended and received much media coverage largely due to the strong line-up of speakers, subjects and topics that were robustly debated and discussed in the plenary and in breakaway sessions. This edition of SA Builder will cover much of what took place in Cape Town. Please read on and enjoy this Congress Edition of SA Builder.

Bafikile Bonke Simelane, President, Master Builders South Africa

The Master Builders SA Executive Committee has set about getting to work on the deliberations and resolutions of Congress 2017 which will address our priorities, focus, action plans and efforts over the next 12 months in the run-up to the 113th 2018 MBSA Congress which is scheduled to be held in Port Elizabeth. We are sharply mindful of, alive and committed to tackling the various institutional capacity and industry challenges that have emanated from the 2017 Congress.

It is against this backdrop that we look forward with cautious optimism to the Finance Minister’s maiden Medium-Term Budget Policy Statement (MTBPS) later this month. It is going to be a difficult juggling act for the Minister to deliver a balanced and confidence-building MTBPS in the midst of a downward trend in major and important business confidence and macro-economic indicators as well as below-target revenue collection forecasts narrowing the fiscal space for social and infrastructure expenditure which does not bode well for our sector which has been in dire straits for a considerable while now.

According to the FNB/BER Building Confidence Index and FNB Property Economist John Loos “Main Contractor confidence rose eight points to 44. However, this increase was not supported by the underlying indicators. In particular, activity and overall profitability deteriorated.” “If one is to look at activity and profitability, it is clear that contractors face very difficult trading conditions characterised by weak demand and stiff competition,” said Loos.

Despite the marginal third-quarter increase, the sector’s performance is likely to be worse relative to the second quarter due to low activity. This is especially true of Main Contractors, where residential and non-residential respondents report growth in activity close to multi-year lows. In addition, a sharp activity drop at the start of the building pipeline (Architects and Quantity Surveyors) points to further weakness in building activity in coming quarters.

This is also corroborated by the Afrimat Construction Index (ACI) compiled by economist Dr Roelof Botha as well as the CIDB and South African Chamber of Commerce and Industry (SACCI) according to whom the indices were impacted by low levels of business and consumer confidence. Political and policy uncertainty is also a significant contributor to the prevailing ‘new normal’ conditions as attested to by the SARB. A national conversation or dialogue is needed.

We need visionary and pragmatic government and industry leadership to take us out of this quagmire to reverse and stem the tide of negative sentiment and downward spiral for the progressive realisation of the sector and country’s potential.

The time is now. It is in our hands.

Posted in General, MBA and MBSA news.

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