The global construction industry had escaped the worst of the recession, even though there would be places “where things will fall apart”, said KPMG industrial, automotive, pharmaceutical and construction industries director Gavin Maile, speaking in Johannesburg.

However, he added that South Africa was unlikely to be one of these places.

The audit, tax and advisory firm on Thursday released its fourth global construction survey.

The survey, concluded in November last year, covered construction companies in 30 countries, including South Africa, with revenues ranging from $250-million to $5-billion.

Maile said the good news was that 53% of respondents noted that they still had the same project pipelines, or bigger, than 12 months ago.

Also, 64% of all respondents were confident that profits would rise or stay the same over the next year.

However, when considering specific regions, contractors in Africa, Europe and the Middle East appear to have been harder hit by the recession, with 54% indicating that their projected profit rates had declined.

“In South Africa profit rates for new contracts are coming under pressure, especially in the housing sector, with numerous contractors bidding on each contract,” added Maile.

Just under a third of global companies reported that they had managed to stick to their margins when winning new business.

Maile noted that the overall margin picture might still change as the long-term work contractors secured prior to the recession was still negotiated at good margins, while new work might not come on such good terms.

Most companies taking part in the survey said that they had worked hard at becoming leaner over the last 12 months as the recession had set in.

Only around 35% of companies had managed to avoid job cuts.

The recession had also brought about a sharper focus on risk, with 73% of respondents in the KPMG survey noting that they had increased their focus here over the last year.

“There is no room to get things wrong in this environment,” commented Maile.

Bid evaluation risk was seen as the single biggest concern.

However, all things considered, the construction industry was still on solid footing.

KPMG engineering and construction practice international sector leader Geno Armstrong said that there was a perception that the global financial crisis had devastated the construction industry.

However, “while it certainly has had a significant impact on the way these companies do business, we’ve found that they view these conditions as an opportunity to get leaner. When the recovery does finally arrive, these companies should be well-prepared to succeed”.