South Africa Construction Market Report 2022

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Executive Summary

South Africa has the third-largest economy in Africa (after Nigeria and Egypt). However, it is Africa’s most industrialized, technologically advanced, and diversified economy. According to the World Bank, the country has an upper-middle-income economy, one of only eight countries in Africa. The South African construction sector is a crucial driver of socio-economic development and a key employment multiplier. In 2021, the industry employed well over 1.2 million people. In addition, it contributed an added value of approximately R111 billion (circa US$7.1 billion) to the country’s gross domestic product (GDP). The output of South Africa’s construction industry was severely affected by the Corona virus (COVID-19) pandemic outbreak, with the country imposing a strict six-week lock down. This contributed to the industry value-add falling sharply by 21.6% year on year (YoY) in Q3 2020.

The country’s construction industry was also one of the hardest hits by the COVID-19 pandemic disruptions in terms of employment, losing 259,118 jobs at the end of Q3 2020. As part of efforts to revive the economy following the devastations of the COVID crisis, the South African government is implementing an economic reconstruction and recovery plan underpinned by massive investment in infrastructure - with a construction project pipeline worth R340 billion in industries such as energy, water, transport and telecommunications. The government is also implementing a National Infrastructure Plan 2050 (NIP 2050). It aims to achieve an investment/GDP ratio of 30% to meet the infrastructure finance gap for public infrastructure, which is estimated at R2.15 trillion (circa US$140 billion) up to the year 2040. The NIP 2050 emphasises blended project finance and public-private cooperation to finance the delivery of public infrastructure. The 2022 budget presented on 23 February 2022 allocated an amount of R812.5 billion (circa US$45.3 billion) to public-sector infrastructure projects across South Africa, including the repair and replacement of existing dams, bridges and railway lines, and the development of the housing, energy, agriculture, transport, water and sanitation and digital infrastructure sectors. South Africa’s construction industry is projected to achieve a growth of 9.1% in real terms in 2022, following a turnaround in 2021 from the COVID induced contraction of 16.5% in 2020. This report provides readers with detailed market analysis, information, and insights into the South African construction industry, including industry trends and issues, as well as an analysis of key risks and oppSouth Africa has the third-largest economy in Africa (after Nigeria and Egypt). However, it is Africa’s most industrialized, technologically advanced, and diversified economy. According to the World Bank, the country has an upper-middle-income economy, one of only eight countries in Africa.

Companies Mentioned

• Alistair Group
• Atlas Crane Hire
• Aveng
• Barloworld
• Bosch Holdings
• Calgro M3
• Coastal Hire
• Concor
• Edwin Construction (Pty) Ltd
• ELB Equipment
• Enza Construction
• Esor Limited
• Exr Construction
• Giuricich Bros Construction (Pty) Ltd
• Group Five Construction (Pty) Ltd
• H&I Engineering
• Hitachi
• Motheo Construction
• Raubex
• Stefanutti Stocks (Pty) Ltd
• The Power Group
• Whbo Construction (Pty) Ltd
• Wk Construction

Methodology

Methodology/Sources

The publisher uses publicly available information to compile construction market reports and collate historical data. Sources used in the reports include World Bank statistics; African Development Bank statistics; IMF statistics; UN statistics; Country national account data and statistics; government ministries; officially released company results and figures; trade bodies and associations; and international and national news agencies.