Consulting Engineers South Africa (Cesa) has called on government to stop talking and start implementing infrastructure projects, warning that failure to do so is causing a loss of technical skills through emigration.
Cesa chief executive Chris Campbell said in a statement yesterday that the lack of investment in infrastructure development, particularly from the public sector, coupled with a lack of government projects and the slow pace at which tenders are awarded, coupled with a high percentage of tender cancellations, was very concerning.
“The impact of this on the consulting engineering and construction sector is having a devastating effect on the sustainability of companies. The industry is experiencing an increase in the loss of technical skills through emigration. It is a well-known fact that infrastructure development underpins economic growth, and we are appealing to government to stop talking and to start implementing infrastructure projects,” Campbell said.
According to Cesa’ recently-released Bi-annual Economic and Capacity Survey (BECS), for the period from January to June, while construction sector confidence showed an improved outlook for this year, projections remained below 2% for 2023/24 on the back of higher lending rates dampening potential investment demand, and slower consumer demand.
Pressure remained on the government to increase investment in infrastructure, up the pace of tender awards, reduce the number of tender cancellations, and put measures in place to arrest the increasing "brain drain" of the country’s technical expertise, it said.
South Africa’s growth outlook was lifted to 2.3% from 1.9% this year and 1.4% for next year, with risks remaining in the form of declining private and public sector investment, lack of structural reforms, higher inflation and the impact of tighter monetary policy leading to higher lending rates.
Cesa said investment in construction still showed no signs of recovery. The gross domestic product growth was expected to remain at or below 2% for the next three years.
In September, Siphamandla Mkhwanazi, a senior economist at FNB, said following a decline to 34 in the second quarter, the FNB/BER Building Confidence Index was unchanged in the third quarter this year. However, “core” building sector confidence (which excludes the building material manufacturing and hardware retail sectors) rose to a more than four-year high of 37.
The following changes in confidence were recorded this quarter, compared to 2Q2022: Architects (+19), sub-contractors (+7), hardware retailers (+4), quantity surveyors (-4), building material manufacturers (-12) and main contractors (-17).
Mkhwanazi said South Africa might be nearing the end of a multi-year decline in building activity. However, the type of work that most likely supported the building sector in the third quarter was unlikely to drive a more sustained recovery.
In November, government spokesperson Phumla Williams, director-general of the Government Communication and Information System (GCIS), said the socio-economic success of Africa depended on the commitment of African countries to invest significantly in the development of their infrastructure.
BUSINESS REPORT