The South African construction industry recorded a CAGR of 13.72% during the review period. The construction industry output slowed following the 2010 FIFA World Cup, but has started to recover. Under the National Infrastructure Plan (NIP) that was adopted in 2012, the government will invest ZAR827 billion (US$100.8 billion) in infrastructure development over the forecast period. The country faces a substantial housing deficit and will need government support to develop public housing and drive the residential construction market. The industrial sector, which had benefitted from low wages, now faces labor unrest and will have to focus on increasing productivity to remain competitive. While the large number of projects announced provides hope for the construction industry, corruption, mismanagement and price fixing threaten to undermine the proper implementation of these developments. Publisher expects the South African construction industry to record a CAGR of 10.87% over the forecast period.
This report provides detailed market analysis, information and insights into the South African construction market, including:-
- The South African construction market's growth prospects by sector, project type and type of construction activity
- Analysis of equipment, material and service costs across each project type within South Africa
- Critical insight into the impact of industry trends and issues and the risks and opportunities they present to participants in the South African construction market
- Assessment of the competitive forces facing the construction industry in South Africa and profiles of the leading players
- Data highlights of the largest construction projects in South Africa
This report provides a comprehensive analysis of the construction industry in South Africa:-
- Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
- Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
- Analysis of key construction industry issues, including regulation, cost management, funding and pricing
- Assessment of the competitive environment using Porter's Five Forces
- Detailed profiles of the leading construction companies in South Africa
Reasons To Buy
- Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
- Assess market growth potential at a micro-level via 600+ time series data forecasts
- Understand the latest industry and market trends
- Formulate and validate business strategies by leveraging our critical and actionable insight
- Assess business risks, including cost, regulatory and competitive pressures
- Evaluate competitive risk and success factors
Key Highlights-
- South Africa's real GDP expanded at 2.5% in 2012, lower than the 3.5% recorded in 2011. Private consumption, which accounts for 60% of GDP, moderated from 4.8% in 2011 to 3.5% in 2012 due to rising inflation, which eroded household purchasing power. However, gross fixed capital formation growth accelerated from 4.5% in 2011 to 5.7% in 2012, as business sentiment improved in the second half of 2012. South Africa's GDP growth is expected to moderate further to 1.9% in 2013, due to prevailing unrest in the mining and agricultural sectors, and a weaker export outlook.
- South Africa's construction industry underwent a period of weak performance during the review period as profit margins continued to decline. According to Statistics South Africa, the construction industry's average profit margin plunged from 5% in 2009 to 2.8% in 2011.
- Gauteng generated the most revenue for the construction industry in 2011, followed by the Western Cape. All other provinces increased their share of the total revenue generated.
- While the demand for prime office space remains strong, overall demand for office space has declined. Developers are wary of speculative construction and the majority of projects are based on pre-let contracts. Retail sales growth also slowed over 2012, as consumer confidence dropped to its lowest mark during the review period.
- Retail space development has largely been concentrated on upgrading existing properties, while the development pipeline for larger properties has slowed. Electricity price rises and expected increases in transport costs are likely to impact overall consumer spending. High unemployment rates, rising inflation and a slowdown in real income growth are affecting consumer confidence.
- The country has a well-established and diversified manufacturing base, with agro-processing, automotives, chemicals, ICT, metals, textiles, clothing and footwear as primary industries. In April 2013, the South Africa's Department of Trade and Industry (DTI) announced the fifth edition of the Industrial Policy Action Plan (IPAP), which will focus on promoting stronger growth in the manufacturing sector. IPAP 2013 focuses on supporting high value-add industries such as green industries, agro-processing, metal fabrication, capital and transport equipment. IPAP 2013 should help drive industrial construction growth over the forecast period.
- Under the National Infrastructure Plan (NIP) adopted in 2012, the government will invest ZAR827 billion (US$100.8 billion) in infrastructure development over the forecast period. ZAR430 billion (US$52.4 billion) will come from the government's treasury with the remaining sum coming from state-owned enterprises such as Eskom and Transnet. The funding from state-owned enterprises will be invested in building new power stations, new transmission lines, new rail, ports, water-transport and various airport upgrades.
- Despite an increase in education, budget and enrolment rates, the education system in general suffers from poor infrastructure and inequalities in the quality of education provided to rural and urban, and rich and poor regions. The government has allocated the largest share of its 2013 budget for education to improve infrastructure and increase accessibility.
- The South African government is implementing reforms to restructure the South African health system. The healthcare buildings category is projected to be the fastest-growing institutional construction category over the forecast period.
- South Africa witnessed a housing boom between 2000 and 2006. The housing boom in the country slowed down as the economy slowed, banks tightened lending conditions and the government implemented measures to limit household indebtedness. Low interest rates and government initiatives to increase mortgage uptake is expected to support the residential construction market. While house prices are expected to rise, real house price growth will be moderate, given continual increases in inflation.
- The country presently faces a large affordable housing deficit. Infrastructure bottlenecks in many cities limit the capacity to deliver affordable and subsidized housing.
Spanning over 80 pages, 81 tables and 36 figures, “Construction in South Africa – Key Trends and Opportunities to 2017” report provide historical (2008-2012) and forecast (2013-2017) valuations of the construction market in South Africa using the construction output and value-add methods.
In addition to covering the Market Overview, Commercial Construction, Industrial Construction, Infrastructure Construction, Institutional Construction, Residential Construction, Company Profile: Aveng Ltd, Company Profile: Murray & Roberts Holdings Ltd, Company Profile: Wilson Bayly Holmes-Ovcon Ltd, Company Profile: Group Five Ltd, Company Profile: Basil Read Holdings Ltd, Market Data Analysis.
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