While the pipeline of infrastructure projects promised under government’s National Development Plan remains largely empty, the country’s housing and human settlements sector is emerging as a key market pillar for the consulting engineering sector, providing around 11% of the industry’s earnings in the first half of the year, the media heard on Monday.
This represented impressive year-on-year growth on the 6% of total earnings it accounted for in the first half of 2014 and was largely attributed to a shift towards mixed-use ‘mega’ human settlement developments, as directed by government’s spatial transformation agenda.
“I’m quite excited about the housing sector,” construction market intelligence firm Industry Insight’s Elsie Snyman said during a presentation of the findings of a bi-yearly report commissioned by sector body Consulting Engineers South Africa into the state of the industry in the first six months of the year.
“We are seeing a lot of big projects, including townhouses, mixed-use developments and increased focus on ‘mega’, mixed-use development, which is like a buffet for an engineering firm.
“The commercial construction industry remained the largest source of revenue for the engineering sector – accounting for 28% of its R24-billion a year earnings – and remained bolstered by higher levels of investment in owner-occupied developments, offices and mixed-use developments.
Projects in Africa, which Snyman asserted still offered “fantastic” opportunities, accounted for 13% of overall earnings, while 21% of profits had been accrued outside of South Africa.
Projects offered by the private sector remained the largest earnings contributor, at 43%, while 25% emerged from local government, 14% from parastatals and 13% from provincial government.
Central government was starting to play an increasingly smaller role in terms of opportunities offered to the engineering industry, with local government emerging as a more important client.
“This is why it’s very important that whatever blockages there are in terms of partnerships between the public and the private sector are being addressed,” she said.
