South Africa Construction Market Report 2022: Projected Growth of 9.1% in Real Terms in 2022, Following a Turnaround in 2021 from the COVID Induced Contraction of 16.5% in 2020

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Jul 28, 2022, 05:45 ET

DUBLIN, July 28, 2022 /PRNewswire/ -- The "South Africa Construction Market Report" report has been added to ResearchAndMarkets.com's offering.

South Africa has the third-largest economy in Africa. Additionally, it is Africa's most industrialized, technologically advanced, and diversified economy.

The country's relative macroeconomic stability, stable democratic government, and well-developed infrastructure have given rise to a dynamic investment environment and established its position as a strategic gateway to other markets in the Southern African region and the rest of the African continent. Infrastructure investment is a central pillar of the South African government's post-COVID-19 economic recovery plans.

The 2022 budget allocated R812.5 billion (circa US$51.7 billion) over the next three years for infrastructure investment. The government's massive spending on major infrastructure projects is expected to drive a construction boom in the country. This report provides an overview of the South African construction market.

Summary

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 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.

Key Topics Covered:

Foreword

1. Executive Summary.

2. South Africa Country Overview
2.1. Geography - Key Cities And Regions In South Africa
2.2. Economic Overview Of South Africa
2.3. South Africa's 2022 Budget
2.4. Spending On Construction
2.4.1. Public Sector Spending Vs Private Sector Spending
2.4.2. Drivers Of Public Sector Spending
2.4.3. Drivers Of Private Sector Spending
2.5. Key Indigenous Local And Foreign Players

3. The South African Construction Industry
3.1. Size And Structure Of The Construction Industry In South Africa
3.1.1. Market Size And Forecasts (By Value)
3.1.2. Market Size And Forecasts (By Industry Sector)
3.2. Opportunities By Sector
3.2.1. Transportation
3.2.2. Residential
3.2.3. Energy
3.2.4. Health
3.2.5. Water Supply & Treatment
3.2.6. Commercial Office Building
3.2.7. Retail (Shopping Centres, Malls Etc.)
3.2.8. Hotels And Tourism
3.2.9. Industrial And Mining
3.3. Challenges In The South African Construction Industry

4. How The South African Construction Market Operates
4.1. Competition
4.1.1. Barriers To Entry
4.1.2. Public Procurement And The Tendering Process
4.2. Industry Supply Chain
4.2.1. Construction Materials - Capacity, Quality & Security Of Supply
4.2.2. Construction Equipment
4.3. Tender Price And Construction Cost Trends
4.3.1. Tender Price Trends
4.3.2. Indicative Construction Costs
4.3.3. Costs Of Construction Inputs
4.4. Labour Resources
4.4.1. Training And Skills Development
4.4.2. Professional Licensing
4.4.3. Skills Shortage
4.4.4. Opportunities For Foreign Professionals
4.5. Contracts And Dispute Resolution
4.5.1. Forms Of Contract
4.5.2. Contractual Risks
4.5.3. Dispute Resolution
4.6. Main Government Clients And Target Sectors
4.7. Key Private Sector Players
4.7.1. Mining
4.7.2. Sustainable Energy
4.7.3. Commercial Real Estate

5. Doing Business In South Africa
5.1. Licences For Construction Contractors
5.2. Language
5.3. Corruption
5.4. Recruiting And Retaining Staff
5.5. Health And Safety

6. Swot Analysis
6.1. Strengths And Weakness
6.2. Opportunities And Threats

7. Future Outlook
7.1. Construction Industry Forecast
7.2. Macroeconomic Outlook
7.3. Political Outlook

8. Industry Associations

9. Key Contacts And Websites

10. Company Profiles