The construction industry is improving, and it’s an indication that our economy is also taking a positive turn.
The construction industry is a significant contributor to employment and growth in South Africa however the industry has been in a slump since the 2010 Soccer World Cup projects. 2015 proved to be a tough year for most construction companies, with lower revenue and profit margins, and less new projects available. But 2016 so far has seen a turnaround.
“There’s been little fanfare, but speaking from experience and knowing what I’ve witnessed in recent months, I believe the South African construction sector is going to be growth engine for our economy,” remarks SmartStone Port Elizabeth founder, and entrepreneur, Mimi Rupp.
For economic growth to accelerate from its lackluster pace of recent years, demand from some source must accelerate first. The construction sector, contributed R109,380.34 million to South Africa’s GDP in the second quarter of 2016, so construction may prove to be one of those sources. Consider the announcement that the Commonwealth Games of 2022 will be held in Durban, the public sector is bound to invest in infrastructure.
“The construction industry is cyclical in nature so upturns and downturns are expected,” advises Rupp. “Even our Government’s ongoing National Development Plan and its continued commitment to public infrastructure investment of R810bn over the next few years remains a positive sign for growth in the construction industry.”
What’s behind the surge?
Several large commercial and industrial investments have been executed or are in the pipeline for Nelson Mandela Bay. “We have the Baywest City development, the Coega Industrial Development Zone continuing to attract new manufacturing companies and the overall upliftment of Port Elizabeth,” adds Rupp.
The expected significant increase in employment as a result of investment within the Bay will increase real estate activity too. “The Nelson Mandela Bay market has always been reliant on salaried individuals,” advises Charlotte Vermaak, principal of Chas Everitt Nelson Mandela Bay.
Another ground-breaking development, according to Vermaak is the new suburb of Westbrook, a 160,000sqm mixed-use node with medical facilities, retail facilities, a business park, a private school and a public square as well as a residential area.
“Then there are several housing developments under way, including the Sardinia Bay Golf Estate, the Royalston Eco Estate and the Kragga Kamma Game Park residential estate. For the those on smaller salaries, the R6bn Coega Ridge development is expected to reduce the city’s 80,000-unit housing backlog by more than half.”
Author: Kimberley Clare Ogden
The following two tabs change content below.