Construction and engineering

Much of the construction taking place across South Africa is in one way or another linked to the 2010 Fifa World Cup. The World Cup has brought significant investments in the construction of new infrastructure. Despite the pressures of the financial crisis, the South African construction has been recording an almost 25% growth.

Infrastructure plays a central role to the South African development agenda. The government is committed to investing heavily in the country’s infrastructure in an attempt to encourage urban renewal. There are tax incentives for investments, refurbishments and construction in certain areas.

Around 2.3-million government houses have been built since elections in 1994, but the demand for housing remains high.

Transportation and logistics have seen a swing to the increased use of roads, makingrepairs and extensions necessary. A massive state infrastructure development and upgrade programme has been put in place to obtain economic efficiency. In this context, the Expanded Public Works Programme seeks to develop labour-intensive industries that will absorb some of South Africa’s unemployment.
Market size indicators
The construction sector is comprised of both the building sector and the civil engineering sector and the potential is huge. The construction sector in South Africa represents less than 5% of GDP. During 2009, construction accounted for R14,8-billion of GDP.

The construction sector is labour-intensive and absorbs some of the unemployment in South Africa. It is estimated that there are 450,000 employees in the formal sector and around 320,000 in the informal sector.

As investments are made in different public projects such as roads, railways, bridges, stadiums and dams, the demand for civil engineers is considerable. This is a business opportunity for foreign civil engineering companies, as there is a shortage of skilled professionals in South Africa.
Market trends
South Africa is one of the few countries in the world that formally recognise water as a human right. Its national water and sanitation programme aims to deliver sustainably on that right.

The 2010 Fifa World Cup is seen as a key incentive for infrastructural developments, including roads (repairs and extensions), a new railway, work on all the international airports. State-owned enterprise Transnet is also undertaking improvements to harbours and ports.

Ministry of Foreign Affairs of Denmark
Image: Government is committed to investing heavily in the country’s infrastructure to encourage urban renewal
Photo: Hannelie Coetzee