President’s Report – October 2023
Another year has passed with members being challenged not only in their respective industries but also from the day-to-day struggle to keep their doors open with many factors making it difficult to manufacture and install products. If it is not a struggling economy boosted by inefficient Government Institutions, it is the lack of investment crippling the construction industry.
The construction Industry is a vital sector for the economic development of our country. It contributes to the creation of infrastructure, housing, employment, and income for millions of people. However, the industry has been in decline since 2016, due to various factors such as weak economic growth, low public and private investment, policy uncertainty, corruption, electricity shortage, site invasions and labour disputes.
The industry also faced supply chain disruptions and material shortages due to the Covid pandemic and the civil unrest that erupted in July 2021 in the Gauteng and KwaZulu-Natal provinces. These challenges have negatively affected the industry's output, employment, and investment. The riots damaged infrastructure and disrupted transport and logistics networks, affecting the delivery of construction materials and equipment.
The total value of recorded building plans passed by larger municipalities fell by 36% year-on-year in the first eleven months of 2020. The construction Industry was also severely affected in terms of employment, losing over 250 000 jobs at the end of 2020, compared with the end of 2019.
Another major challenge facing the construction industry is the energy crisis, which has been caused by the inadequate capacity and reliability of Eskom. The frequent power outages have hampered construction activities and increased costs for contractors, manufacturers, installers, and developers. The energy crisis has also deterred foreign investors from financing construction projects in our country.
Despite these challenges, there are some positive signs and opportunities for the recovery and growth of the construction industry. Analysts envisage that the construction industry should stabilize in the future.
Organized criminal groups also known as the Construction Mafia have been targeting construction sites since 2014 and demand money or a stake in development projects. These groups, operate under the banner of "Business Forums" and claim to represent the interests of local communities and businesses. However, their activities amount to extortion, intimidation, violence, and disruption of vital infrastructure and construction projects.
At the Master Builders South Africa (MBSA) Annual Conference in September of this year it was noted that more than R100 billion infrastructure and construction projects had been affected by these disruptions across the country. The construction mafia has also damaged the reputation and image of the South African construction industry, both locally and internationally.
Order and confidence
The construction industry is one of the largest employers in South Africa, providing jobs for about 1.4 million people, or 8.5% of the total workforce. However, the industry has been shedding jobs due to the economic downturn and the construction mafia's activities. The construction mafia poses a serious threat to the South African construction industry and the country's economic development.
If they are not stopped, they could have disastrous consequences for the industry and the country in the long term. Therefore, there is an urgent need for a comprehensive strategy to stop the construction mafia and restore order and confidence in the construction sector.
Areas of interest
Regionally the Western Cape has seen tremendous growth in both the commercial and residential sectors. Development in this area has proven to be much more prevalent than in Gauteng, Eastern Cape and KwaZulu-Natal.
An influx of new thermally broken systems has been observed filtering into the market and this is due to energy efficiency requirements in SANS 10400-XA. With this, testing in accordance with SANS 613 has become imperative for simulation testing. Although SANAS accreditation has never been a requirement from our members, SANAS accreditation has been acquired at our Gauteng Test Rig.
The debate around thin aluminium extrusions being imported and sold into the local market is ongoing and ASDA is looking at the testing of these systems to determine if they are fit for purpose.
SAGGA, in collaborating with KIM (Key Industry Management), a division of SARS, is busy with training of these officials to equip them with the identification of imported glass on wrong tariff codes.
Educating our members is one of the main focus points currently for our Associations. Our training courses have been well received by industry and our members. The new building is serving the Association and its members well and the introduction of our new artisan training centres will be a well-awaited new addition. The AAAMSA Consultants continue to serve both our members and the public with inspections on site and assistance with any technical enquiries.
Interest has been shown in the Association by neighbouring countries for membership. For this reason, AAAMSA will be exploring these interests with the intension of growth. Currently the Association membership has a total of 1 725 members.
The financial status of the Association is sound, and we are looking forward to making it even stronger in the future with more developments and increased visibility in the marketplace.