The year ahead is promising to be a good one for the South African construction industry with both increased private sector spending and greater government infrastructure spending being on the cards. These insights come courtesy of the 2022 Construction Industry Outlook Survey which was conducted by RIB CCS at the end of last year. According to RIB CCS CEO, Andrew Skudder, this is particularly good news for the South African industry where the value of passed building construction plans decreased by as much as 37% year-on-year for most of 2020. In order to better understand the industry outlook for the year, one has to have a closer look at the scope of construction projects in the pipeline, industry-related concerns that can hinder growth and probability, and the digitisation of the sector.
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Major Projects are Planned
There are a number of exciting projects planned for the year ahead that will contribute considerably to the boost the industry is expected to enjoy according to Shudder. One such initiative is the on-going Modderfontein Mega City project that is being built in Johannesburg. Upon completion, the US $8bn development will occupy approximately 1,600 hectares of land between Sandton and OR Tambo International Airport. Other projects planned to kick off this year include a major upgrade of the N1 highway north of Musina in the Limpopo province and the construction of the Nkuna Smart City, also in the Limpopo province, which is expected to integrate commercial, industrial, office, residential, and hospitality land use.
A Number of Industry Concerns Exist
Despite the positive outlook the construction industry is enjoying, there are a number of concerns that cannot be ignored. These concerns margin pressures, supply chain reliability, and the absence of productivity growth. In addition to this, construction site injuries continue to plague the industry. According to a statement released by the government, there are, on average, 2.5 fatalities in the construction sector every week. As any good construction accident attorney will attest, construction accident cases can pose a series of unique challenges. These challenges can impact the outcome of legal cases and also result in an amplified financial burden if not addressed in an effective and timeous manner.
A Big Move Towards Digitisation
During the interview, Skudder stated that the worldwide interest in mobile technology will have a big impact on the South African construction industry. It is expected to especially impact site-based activities including safety and quality control procedures, defect identification and management, and site timesheets. Operators within the industry have a number of options when it comes to embracing digitisation, including buying various tools that can each perform a specific task or investing in a singular tool that can perform multiple tasks. With 15% of survey respondents considering investing in integrated digital tools that can streamline a number of processes, the local IT and software development sector may also find itself with an increased workload during the year ahead.
The year ahead is promising to be a good one for the local construction industry. This is exceptional news after what can only be described as a very bleak period during 2020 and 2021.