A skills shortage continues to hurt the South African construction industry, a new survey has revealed. The Construction Industry Development Board and Bureau for Economic Research SME Business Conditions Survey for 2016 Q1 indicates that general builder confidence dropped from 46 to 44 in the first quarter of 2016, which is attributed to a slowdown in building activity and increasing pressure on profitability.
The research shows that general builders in Grades 5 and 6 and Grades 7 and 8 recorded higher confidence levels, improving by five and nine index points respectively, while general builders in Grades 3 and 4 dropped 24 index points.
Despite the raise in Grades 7 and 8, confidence remains below the 50 point mark that is the cutoff point between contraction and expansion. Considering the whole region, business confidence rose in the KwaZulu-Natal and Eastern Cape. However general builders in Gauteng and Western Cape were not satisfied with current business conditions compared to the fourth quarter of 2015.
Regionally, Gauteng recorded an improvement of nine index points while KwaZulu-Natal, the Western Cape and Eastern Cape declined by two, five and 12 percentage points respectively.
PwC’s third edition of South Africa Construction confirms these findings, with South Africa’s construction industry in 2015 being characterised by industrial actions, delays on projects and questions raised around safety concerns on structural projects.
According to the survey, lack of access to work remains a challenge for both general building and civil engineering class of works in all grades, at a net balance of 70%.
