Aug 01, 2008
Engineering, construction industry grows despite global market volatilityBack
© Reuse this
Saace CEO Graham Pirie says that even though the local infrastructure roll-out programme and the infrastructure investments from emerging markets such as China were initiated before the period of global market volatility, infrastructure builds cannot be halted as they are vital to the economic growth of countries.
“Government’s commitment of R500-bil-lion, in addition to the money invested in the 2010 FIFA World Cup stadiums, to be spent over three years, means that 2010 is a small component of a larger investment that government is encouraging,” says Pirie.
He comments that the infrastructure roll-out programme is necessary, given the 20-year infrastructure investment backlog that South Africa needs to resolve.
Pirie says that events hosted in the country since 1994 have encouraged infrastructure reinvestment. “Prior to 1994, South Africa didn’t host sporting or political events that would draw an influx of tourists into the country, so the need for infrastructure reinvestment was minimal. “From 1994, with the 1995 rugby World Cup looming, government got serious about resolving this. Certain sporting events, such as the 1995 rugby World Cup, the 2003 cricket World Cup and the 2010 soccer World Cup, focus the right amount of attention on infras- tructure reinvestment at the right time,” says Pirie.
The foremost challenge is the skills crisis. “Because of the 20-year backlog of noninvestment, there was very little focus on building the country’s skills base. “South Africa started to feel the effects in 2005, but the real effects of the crisis are being felt now. Companies are realising that they have to work smarter in order to survive,” says Pirie.
There are a number of initiatives being rolled out to decrease the effects of the skills crisis. Pirie reports that one such initiative is the promotion of engineering as a lucrative career to pursue. “This is predominantly being promoted through the Young Engineers Forum, which is a forum made up of engineers between the ages of 20 and 35. “The Young Engineers Forum visits schools, promoting the selection of engineering as a career path,” says Pirie. He adds that, in the interim, South Africa is importing skills and enticing engineers out of retirement.
In addition, Pirie reports that the 470 Saace member companies currently contribute about R100-million a year towards education and training. Pirie further adds that, should government reinstate bursaries for study towards a career in the public sector, the skills crisis will improve considerably.
Estimations show that China’s consumption of steel, a key component in international infrastructure expansion programmes, will grow by 11,5% in 2008 and a further 10% in 2009, accounting for 35% of the world total in 2008. This is expected to reach 36,7% of world total by 2009. Indian steel forecasts show that apparent steel use will increase by 8,9% this year and a further 12,1% in 2009.
China and India are following the lead of the United Arab Emirates, a country that has seen a plethora of infrastructure expansion initiatives since 2000.
Pirie says that the quality of South African training and education in the past has placed South African consulting engineers and construction firms in high demand oversees.
Pirie reports that there has been a significant amount of capital investment in Africa, which is helping to drive infrastructure reinvestment on the continent. “One has to look at Mozambique and Angola and the transformation in those countries after the attainment of relative political stability,” says Pirie.
“Political stability plays an important role in infrastructure investment. “There is a feeling in the industry that if Zimbabwe can attain political stability, there will be a significant amount of post conflict reconstruction, which will present many opportunities to companies in that market,” says Pirie.
He adds that, in the past, companies found it easy to go into Africa and set up businesses, but found it difficult to move around Africa owing to inadequate road infrastructure.
Pirie says that one has to commend the efforts of the New Partnership for Africa’s Development (Nepad) for promoting interconnectivity within Africa.
“Nepad has done a significant amount of work in improving the state of the roads and related infrastructure so that companies operating in Africa are able to do so without any constraints,” concludes Pirie.
Edited by: Laura Tyrer© Reuse this
To subscribe email email@example.com or click here
To advertise email firstname.lastname@example.org or click here
Other Construction News
Updated 41 minutes ago Daimler Trucks & Buses Southern Africa (DTBSA) announced on Thursday that it had expanded its area of responsibility from South Africa, Lesotho, Botswana, Namibia and Lesotho, to also include Malawi, Mozambique, Zimbabwe and Zambia, through the formation of the...
Updated 2 hours 21 minutes ago Following six years of negotiations between governments, the aviation industry and environmental group observers, the International Civil Aviation Organisation (Icao) has designed the world’s first carbon dioxide (CO2) efficiency standard for aircraft. The standard,...
Updated 2 hours 21 minutes ago JSE-listed ceramic tiles manufacturer Italtile has reported a systemwide turnover increase of 13% to R3.08-billion, while same-store revenue improved by 11% in its financial overview of the six months ended December 31, 2015. During the period, six new TopT stores...
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
This Week's Magazine
Power and automation company ABB is in the launch phase of its highest payload, multipurpose industrial robot, the IRB 8700. The robot has a reach of 3.5 m and can handle a payload of up to 800 kg. “When designing the IRB 8700, we emphasised reach and payload, as...
Identity and Access Management (IAM) is a critical facet of a connected security ecosystem, as controlling the confidentiality, integrity and authorisation of data access and use is key to securing new digital business channels. However, companies face several...
Data underpins digital business models, the digital economy, the Internet of Things and the fundamental changes in the ways people interact and protecting data is crucial to securing new ways of doing business, says T-Systems South Africa information and...
The City of Cape Town will issue a tender for the procurement of electric buses for its MyCiTi service, in line with the council’s commitment to lower its carbon footprint, says executive mayor Patricia de Lille. The tender, to be advertised early in February, will...
The iSimangaliso Wetland Park Authority signed a R10-million contract last month with local tailings storage facility specialists Cyclone Engineering Projects to remove about 100 000 m3 of dredge spoil obstructing the natural course of the uMfolozi river, in...