Tourism potential spurs new construction opportunities in KwaZulu-Natal

Durban is currently scoring top marks when it comes to providing attractive infrastructure and boasts the lowest transportation costs per province in South Africa.  However, as the City of Durban and the province of KwaZulu-Natal strive to achieve their full tourism potential, there still remains an increasing demand for improved service delivery and construction management.


Local training available to construction professionals at KZN Construction Expo

KwaZulu-Natal’s (KZN) construction sector currently contributes 4.5% to its provincial GDP on an annual basis with the province allocating a budget of R350 million to award tenders for maintenance, storm damage, school fencing programmes, water and sanitation, repairs and renovations to emerging contractors.  Against this backdrop, the KZN Construction Expo creates a favourable climate for local capacity building within the construction sector in support of the province’s overall development.


Cummins breaks ground to build state-of-the-art premises at Waterfall Logistics Precinct

Cummins Southern Africa is pleased to announce the relocation of their Southern Africa Distribution Business to Waterfall Logistics Precinct - Gauteng’s new innovative work, live and play destination in Waterfall. The new premises will form part of the Waterfall connected hub which offers a fully integrated lifestyle that embraces the ultimate work-life balance. Waterfall Logistics Precinct is fast shaping up to become a new CBD, linking Sandton to Waterfall.


Construction prices forecast to rise

MMQSMace, a leading South African cost consultancy business, and Stellenbosch University’s Bureau for Economic Research (BER) have forecast a South African construction tender price growth of 7,4% in 2017, including 5,3% inflation, and an 8,8% increase in 2018, including 5,1% inflation.

Analysis shows that the construction sector in South Africa is suffering amid the country’s wider economic turmoil.

The data has shown a sharp rise in construction prices of 9.5% in the first quarter of 2017 – good news for construction companies but likely to be balanced out with a restrained performance across the rest of the year.

The strong increase in early 2017 has been driven by high national inflation pressure and a marked increase in input costs. Optimism in the sector is low, with industry respondents reporting negative confidence levels not seen since the 2008/9 economic downturn.

Business plan permissions – a measure of the value of planning permissions granted in South Africa – fell significantly across all construction sectors in March by 16,3% and then more radically in April by 41,2%. Overall, the value of building plan permissions was down by 21,9% year-on-year compared to the same period in 2016.

The economic turmoil has had a particularly serious impact on non-residential construction, which has seen a significant drop in both building plan permissions (down by 67,2%) and completions (down by 62,5%) year-on-year compared to 2016.

This is balanced out by a more positive outlook in the residential sector, which saw a significant upswing (52%) in year-onyear completion value compared to 2016. However, the fall in the construction pipeline is beginning to bite here as well, meaning the sector cannot be relied upon to provide a steady stream of construction work.

Overall, the sector is likely to be looking forward to December, when there are hopes that the appointment of a new leader by the ANC will bring some political and economic stability.

Mandla Mlangeni, Director of MMQSMace Cost Consultancy, said, “We’re seeing a strong rise in tender prices in South Africa in 2017 driven by significant input price growth and general inflation here compared to other markets. A lack of business confidence and an uncertain political and economic outlook has led to a stagnation in investment across both the commercial office and residential sectors this year, with increasing reliance on the planned infrastructure pipeline for our forecast of an improved outlook in 2018."

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