creamer media

The Building Research Strategy Consulting Unit of business consultancy BMI estimates that investment in construction and building in South Africa in 2011 was R320-billion.

However, construction demand from both the public and private sectors has slumped, on the back of global and local economic uncertainty.

The construction boom that preceded the slump saw many new construction companies entering the market. This has resulted in a situation of overcapacity in the current environment of reduced demand for construction services. Further, with fewer major contracts in the offing, competition in the construction sector has become increasingly intense. Aggressive pricing, in an effort to secure contracts, has resulted in pressure on company margins, with several of the major participants in the market reporting margin erosion.

However, the South African government’s strong policy focus on infrastructure is positive and should eventually begin translating into orders, as well as help rebalance many South African construction companies' order books, which are currently heavily weighted towards private sector contracts, with many construction companies in fact seeking out business in markets beyond South Africa's borders

This electronic report outlines the state of South Africa's construction industry and the changes taking place under headings, such as key participants, local demand, geographic diversification and competition, among others.

Published on: 29 March 2012.

Table of contents

Key developments 1

Business environment 2

Key participants 3–6

• Aveng 3
• Basil Read 3
• Esorfranki 3
• Group Five 4
• Murray & Roberts 4
• Raubex 4
• Sanyati Holdings 5
• Sea Kay 5
• Stefanutti Stocks 5
• Wilson Bayly Holmes-Ovcon 5

Local demand 7–11

• Energy 9
• Water 10
• Transport 10
• Property 11
• Mining and industry 11

Geographic diversification 12–15

• Activities in the rest of Africa 12
• Australia 14
• The Middle East 14
• Asia 14
• Europe 15

Competition 16

Corporate activity 17–19

Black economic empowerment 20–23

• Ownership 20
• Management control and employment equity 20
• Skills development 22
• Preferential procurement, enterprise development and corporate social investment 22
• Ratings 22

Skills 24–25

Safety 26

Environmental considerations 27–28

Materials challenges 29

Outlook 30–32

Appendices 33–37

1. Major public sector infrastructure projects 33
2. Association contact details 35
3. Company contact details 36

Main sources 38–39