Civil engineering confidence down: report

Posted On Wednesday, 10 March 2004 02:00 Published by eProp Commercial Property News
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Between 5,000 and 8,000 jobs could be lost in the civil engineering industry this year, industry sources said.

Construction IndustryBetween 5,000 and 8,000 jobs could be lost in the civil engineering industry this year, industry sources said.

Confidence levels in the industry were down by 43 percent, according to a Civil Engineering Industry Report. The report projected a contraction of 14 percent in the industry this year. It gave a number of reasons for this declining confidence.

Many private clients were cancelling jobs because of economic and legislative restrictions. Also, political sensitivity around large projects, such as the N2 Wild Coast toll road, made such projects uncertain.

In addition, the cancellation of two big highway projects in 2003 (the John Ross Highway -- KZN, and the Super Highways Project -- Gauteng) raised questions.

The upcoming election was also likely to delay large projects.

The report added that contracts were becoming fragmented due to restructuring of provincial and local budgets. This meant increased competition and lower profit margins.

The report said all sizes and types of contractors expressed a decline in optimism, and this was reflected in declining employment levels towards the end of 2003. Projections for 2004 showed large-scale job losses.

Another factor highlighted in the report was a declining interest in cross-border and regional activity. This was because contractors were wary of late payment, and the legal uncertainties of working in many African countries.

The report welcomed the national budget's emphasis on job creation through public works, but highlighted that allocations were only the first step: local and provincial governments needed to implement projects "intelligently".

The report slammed government's overt focus on welfare spending, at the expense of economic infrastructure.

It concluded that unless there was logistical support for improving the capacity of rail, roads, ports and airports, the economy of South Africa would experience increasing infrastructure constraints, "with devastating effects on sustainable job creation end economic growth."

 

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