According to the ‘most likely’ scenario forecast from Industry Insight, the construction sector is set to shrink by roughly 22% in 2020. This will see over 100 000 jobs lost in the short term.
The current value of the construction industry is just over R200 billion, compared with R300 billion in 2008 – a loss of R100 billion over a 10-year period.
Some listed companies were in business rescue even before the Covid-19 pandemic and are being decimated by the current lockdown. Group Five is no more; it is liquidating its business completely. Esor is struggling to find a buyer.
Many more construction companies of all sizes are in trouble, teetering on the brink of collapse, threatening an unprecedented jobs bloodbath. It should be noted that the construction sector is the biggest employer of the poorest of the poor at entry skills level, after agriculture.
This is the saddest situation, not just in terms of the loss of livelihoods, but also because of the loss of construction sector capacity – capacity that is sorely needed if the country’s infrastructure build programme is to be executed.
Covid-19 has obviously caused huge disruption on construction sites, with productivity levels dropping because of all the health and safety protocols that must be followed, such as sanitising the site, implementing measures to ensure social distancing and screening staff. If an employee tests positive for Covid-19, in most cases the entire site must shut down so other workers can get tested. Some may need to go into isolation.
Civil engineering was the first construction sub-sector to be allowed limited operations during Level 3 lockdown. As a demonstration of its ability to manage construction sites in order to save lives and preserve livelihoods, its representative body, the South African Forum of Civil Engineering Contractors (Safcec), has developed a free-to-use project-based online reporting and monitoring tool to assist in the implementation of Covid-19 workplace protocols by contractors in South Africa – ConstructionSector.Online can be accessed here.
We need healthy workers to drive construction activities, thereby driving the economy. Our contractors are very disciplined and cooperative in this regard. As part of our commitment to transparency in dealing with Covid-19 in the workplace, Safcec has also established a Construction Tripartite Health and Safety Committee, under the auspices of the Bargaining Council for the Civil Engineering Industry.
It brings together representatives from government (the Department of Employment and Labour, and the Department of Public Works and Infrastructure), organised labour (the National Union of Mineworkers and the Building, Construction and Allied Workers Union) and organised employers (Safcec and Consolidated Employers Organisation).
Over 480 projects with a collective value of over R34 billion are registered on the portal, and report live via the site.
In terms of what has been revealed by the ConstructionSector.Online tool, since the easing of lockdown restrictions, the sector has so far screened over 182 000 individuals on construction sites, with only 23 confirmed [Covid-19] cases, 18 of which were diagnosed before sites were opened. Only five cases were discovered on operational sites during site screening processes, four of which are from the Western Cape (two individuals from one project and the remaining two from different projects), and one post-leave individual from the Free State.
Through the online tool, we know exactly the project type (bridge or road), owner (public or private), location (town and province) and a separation between civil and building projects. This helps in the identification of project types more susceptible to risk and allows for the implementation of extra safety measures commensurate with the assessed risk.
The monitoring tool, which depicts national and provincial dashboards, is accessible to relevant authorities, such as the Department of Employment and Labour and the Department of Trade, Industry and Competition. A national launch of the tool showcasing all provinces will soon be undertaken.
Infrastructure rollout pivotal
In terms of rebuilding the sector and the economy, massive infrastructure investment by the government is required to prevent job losses, and will play a countercyclical role. Delays associated with infrastructure rollout need to be addressed in order to help kick-start the economy.
A genuine, mutually beneficial partnership-based approach between government and the private sector will go a long way in addressing the country’s economic crisis, provided that government supports such initiatives in both words and deeds. The Public Private Growth Initiative is providing such a platform.
It will also be interesting to see what comes out of the Sustainable Infrastructure Development Symposium announcements made by President Cyril Ramaphosa, as this will reflect the extent of the government’s commitment to working in partnership with the private sector to salvage the economy.
The relief measures announced by government, such the four-month reprieve from paying the Skills Development Levy, are welcome moves as many companies are teetering on the brink of collapse.
This relief, although on its own is not a panacea, will benefit Safcec’s constituency, whose construction sub-sector of roads and civils contributes 70% of the total skills development levies to the Construction Education and Training Authority (Ceta).
We are shocked to learn that the Department of Higher Education, Science and Technology is on a mission to have this presidential relief revoked, as this would be counterproductive.
It would add to the accelerated decline and closure of more construction companies, resulting in more job losses, which in turn would mean fewer levies payable beyond the four-month relief period, as skills levies constitute a 1% deduction from the total payroll of each employer with 500 or more employees.
We hope the department will abandon its purported plans.
We need a capacitated industry to deliver the current infrastructure build programme, including the one to be announced by Ramaphosa at the Sustainable Infrastructure Development Symposium on June 23.
The construction sector needs all the support it can get if it is to recover – from a dependable infrastructure pipeline to a prompt-payment culture within the public sector for services rendered.
Webster Mfebe is CEO of the South African Forum of Civil Engineering Contractors (Safcec).