Cidb concerned over 140 000 construction job losses

7th November 2017

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

     

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Construction Industry Development Board (cidb) monitoring and evaluation project manager Ntando Skosana on Tuesday described the loss of 140 000 jobs in the local construction industry between the first and third quarters of this year as “disheartening”.

The construction industry is an important job creator in the country, having a multiplier effect. These job losses are a reflection of the pressure that the construction industry is under, which is also reflected by Statistics South Africa’s gross domestic product statistics that show a 0.8% and 0.5% contraction in the construction industry quarter-on-quarter in the first and second quarters of the year.

Since 2008, the construction industry has created around 184 000 jobs; however, the cidb believed this had not been enough to accommodate the new entrants in the labour force.

Meanwhile, the cidb/Bureau of Economic Research employment index, which measures the net balance of employers reporting a change in employment, either negative (shedding labour) or positive (adding labour), has remained negative since 2008 for the general building and civil engineering sectors, reflecting that more employers are laying off staff than employing additional staff.

“This unfavourable employment index is largely attributable to the ongoing difficult business conditions; a slowdown in construction activity and increasing pressure of profitability,” the organisation said in a statement.

Skosana noted that construction workers were being laid off owing to a decline in construction activity. “The lack of demand for their services has created job losses”.

These difficult business conditions are reflected in the cidb/SME Business Conditions Survey which has reflected ongoing pessimism in the industry since 2009.

From a provincial perspective, four provinces stand out in terms of their contribution to employment in the construction sector, namely the Eastern Cape, Gauteng, KwaZulu-Natal and the Western Cape.

These collectively account for around 71% of total formal and informal construction employment. Over the past two quarters, Gauteng has shed 113 000 jobs. “This is of major concern, because Gauteng contributes around 28% to total construction employment,” noted Skosana.

Underspending by government departments is a significant contributor to the lack of demand, which, in turn, results in lost employment opportunities.

At the end of the 2016/17 municipal financial year, it was reported by the National Treasury that municipalities underspend on their capital budget by around R15-billion.

In the cidb small- to medium-sized enterprise (SME) Business Conditions Survey, contractors rate insufficient demand for work as the major constraint or hindrance for the growth and profitability of their business.

Informal employment in the construction industry has grown at a higher rate and pace than formal employment. From 2008 to the third quarter of this year, there was an increase of 68 000 jobs, or 20%, in the number of people employed in the construction informal sector compared with 116 000 jobs, or 14%, in the formal sector.

Paradoxically, although most contractors are still shedding labour, the cidb SME Business Conditions Survey shows that some contractors are increasingly rating the shortage of skilled labour as a constraint to business growth and to profitability – although the levels are still below the 50% level.

Skosana noted that job losses largely reflect unskilled, low and semi-skilled labour.

“Skilled labour is in short supply, and this can also be seen from the Career Junction vacancy index for building and construction which shows a higher rate of vacancies in skilled occupations compared with the semi-, low and unskilled occupations.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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