The civil construction industry in South Africa has shed around 10 000 jobs over the last 12 months, says FNB chief economist Cees Bruggemans, with many more expected to follow.

He says employment in the industry peaked at around 160 000 people in the middle of 2009. With 10 000 jobs lost, he expects another 20% to 25% jobs to go before employment levels in the civil construction industry start stabilising.

“Our view is that growth in turnover [in the industry] is heavily negative,” notes Bruggemans.

He says the level of employment of the civil construction industry is currently too high for the amount of work available.

Bruggemans expects employment in the industry to stabilise around the 100 000 to 120 000 job level.

The FNB quarterly report on the state of the civil construction industry in South Africa, released last week, indicates that 67% of respondents to a survey on the subject regard business conditions as unsatisfactory.

The civil industry obtains 88% of its work from the government sector.

With projects relating to the 2010 FIFA World Cup drawing to a close and the rescoping of work available from some public corporations – such as Eskom, which has fallen behind with its capital expenditure programme owing to funding problems – construction activity is declining.

The survey shows that the scarcity of new construction work has caused margins to come under pressure, which adversely affects the growth in the overall profitability of businesses that participated in the survey.

Just under 70% of respondents then also report lower profitability compared with the same quarter a year ago.

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