Construction in South Africa - Key Trends and Opportunities to 2017


#173442

80pages

Timetric

$ 1950

In Stock


Synopsis

This report provides detailed market analysis, information and insights into the South African construction market, including:

  • The South African construction market’s growth prospects by sector, project type and type of construction activity
  • Analysis of equipment, material and service costs across each project type within South Africa
  • Critical insight into the impact of industry trends and issues and the risks and opportunities they present to participants in the South African construction market
  • Assessment of the competitive forces facing the construction industry in South Africa and profiles of the leading players
  • Data highlights of the largest construction projects in South Africa

Executive summary

The South African construction industry recorded a CAGR of 13.72% during the review period. The construction industry output slowed following the 2010 FIFA World Cup, but has started to recover. Under the National Infrastructure Plan (NIP) that was adopted in 2012, the government will invest ZAR827 billion (US$100.8 billion) in infrastructure development over the forecast period. The country faces a substantial housing deficit and will need government support to develop public housing and drive the residential construction market. 

The industrial sector, which had benefitted from low wages, now faces labor unrest and will have to focus on increasing productivity to remain competitive. While the large number of projects announced provides hope for the construction industry, corruption, mismanagement and price fixing threaten to undermine the proper implementation of these developments. Timetric expects the South African construction industry to record a CAGR of 10.87% over the forecast period.

Scope

This report provides a comprehensive analysis of the construction industry in South Africa:

  • Historical (2008-2012) and forecast (2013-2017) valuations of the construction market in South Africa using the construction output and value-add methods
  • Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
  • Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
  • Analysis of key construction industry issues, including regulation, cost management, funding and pricing
  • Assessment of the competitive environment using Porter’s Five Forces
  • Detailed profiles of the leading construction companies in South Africa

Reasons to buy

  • Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
  • Assess market growth potential at a micro-level via 600+ time series data forecasts
  • Understand the latest industry and market trends
  • Formulate and validate business strategies by leveraging our critical and actionable insight
  • Assess business risks, including cost, regulatory and competitive pressures
  • Evaluate competitive risk and success factors

Key highlights

  • South Africa’s real GDP expanded at 2.5% in 2012, lower than the 3.5% recorded in 2011. Private consumption, which accounts for 60% of GDP, moderated from 4.8% in 2011 to 3.5% in 2012 due to rising inflation, which eroded household purchasing power. However, gross fixed capital formation growth accelerated from 4.5% in 2011 to 5.7% in 2012, as business sentiment improved in the second half of 2012. South Africa’s GDP growth is expected to moderate further to 1.9% in 2013, due to prevailing unrest in the mining and agricultural sectors, and a weaker export outlook. 
  • South Africa’s construction industry underwent a period of weak performance during the review period as profit margins continued to decline. According to Statistics South Africa, the construction industry’s average profit margin plunged from 5% in 2009 to 2.8% in 2011.
  • Gauteng generated the most revenue for the construction industry in 2011, followed by the Western Cape. All other provinces increased their share of the total revenue generated.
  • While the demand for prime office space remains strong, overall demand for office space has declined. Developers are wary of speculative construction and the majority of projects are based on pre-let contracts. Retail sales growth also slowed over 2012, as consumer confidence dropped to its lowest mark during the review period. 
  • Retail space development has largely been concentrated on upgrading existing properties, while the development pipeline for larger properties has slowed. Electricity price rises and expected increases in transport costs are likely to impact overall consumer spending. High unemployment rates, rising inflation and a slowdown in real income growth are affecting consumer confidence. 
  • The country has a well-established and diversified manufacturing base, with agro-processing, automotives, chemicals, ICT, metals, textiles, clothing and footwear as primary industries. In April 2013, the South Africa’s Department of Trade and Industry (DTI) announced the fifth edition of the Industrial Policy Action Plan (IPAP), which will focus on promoting stronger growth in the manufacturing sector. IPAP 2013 focuses on supporting high value-add industries such as green industries, agro-processing, metal fabrication, capital and transport equipment. IPAP 2013 should help drive industrial construction growth over the forecast period.
  • Under the National Infrastructure Plan (NIP) adopted in 2012, the government will invest ZAR827 billion (US$100.8 billion) in infrastructure development over the forecast period. ZAR430 billion (US$52.4 billion) will come from the government’s treasury with the remaining sum coming from state-owned enterprises such as Eskom and Transnet. The funding from state-owned enterprises will be invested in building new power stations, new transmission lines, new rail, ports, water-transport and various airport upgrades.
  • Despite an increase in education, budget and enrolment rates, the education system in general suffers from poor infrastructure and inequalities in the quality of education provided to rural and urban, and rich and poor regions. The government has allocated the largest share of its 2013 budget for education to improve infrastructure and increase accessibility. 
  • The South African government is implementing reforms to restructure the South African health system. The healthcare buildings category is projected to be the fastest-growing institutional construction category over the forecast period.
  • South Africa witnessed a housing boom between 2000 and 2006. The housing boom in the country slowed down as the economy slowed, banks tightened lending conditions and the government implemented measures to limit household indebtedness. Low interest rates and government initiatives to increase mortgage uptake is expected to support the residential construction market. While house prices are expected to rise, real house price growth will be moderate, given continual increases in inflation.
  • The country presently faces a large affordable housing deficit. Infrastructure bottlenecks in many cities limit the capacity to deliver affordable and subsidized housing.
Table of contents

1 Executive Summary

2 Market Overview
2.1 The Domestic Economy
2.2 Key Trends and Issues
2.3 Key Construction Indicators
2.4 Benchmarking by Market Size and Growth
2.5 Price Dynamics
2.5.1 Salaries
2.5.2 Equipment
2.5.3 Materials
2.5.4 Energy
2.6 Porters Five Forces Analysis
2.6.1 Bargaining power of suppliers – medium
2.6.2 Bargaining power of buyers – medium
2.6.3 Barriers to entry – low to medium
2.6.4 Intensity of rivalry – high
2.6.5 Threat of substitution – low
2.7 Demographic Profile

3 Commercial Construction
3.1 Performance Outlook
3.2 Key Drivers and Issues
3.3 Data and Projects Highlights

4 Industrial Construction
4.1 Performance Outlook
4.2 Key Drivers and Issues
4.3 Data and Projects Highlights

5 Infrastructure Construction
5.1 Performance Outlook
5.2 Key Drivers and Issues
5.3 Data and Projects Highlights

6 Institutional Construction
6.1 Performance Outlook
6.2 Key Drivers and Issues
6.3 Data and Projects Highlights

7 Residential Construction
7.1 Performance Outlook
7.2 Key Drivers and Issues
7.3 Data and Projects Highlights

8 Company Profile: Aveng Ltd
8.1 Aveng Ltd – Company Overview
8.2 Aveng Ltd – Business Description
8.3 Aveng Ltd – Main Products and Services
8.4 Aveng Ltd – History
8.5 Aveng Ltd – Company Information
8.5.1 Aveng Ltd – key competitors
8.5.2 Aveng Ltd – key employees

9 Company Profile: Murray & Roberts Holdings Ltd
9.1 Murray & Roberts Holdings Ltd – Company Overview
9.2 Murray & Roberts Holdings Ltd – Business Description
9.3 Murray & Roberts Holdings Ltd – Main Services
9.4 Murray & Roberts Holdings Ltd – History
9.5 Murray & Roberts Holdings Ltd – Company Information
9.5.1 Murray & Roberts Holdings Ltd – key competitors
9.5.2 Murray & Roberts Holdings Ltd – key employees

10 Company Profile: Wilson Bayly Holmes-Ovcon Ltd
10.1 Wilson Bayly Holmes-Ovcon Ltd – Company Overview
10.2 Wilson Bayly Holmes-Ovcon Ltd – Business Description
10.3 Wilson Bayly Holmes-Ovcon Ltd – Main Products and Services
10.4 Wilson Bayly Holmes-Ovcon Ltd – History
10.5 Wilson Bayly Holmes-Ovcon Ltd – Company Information
10.5.1 Wilson Bayly Holmes-Ovcon Ltd – key competitors
10.5.2 Wilson Bayly Holmes-Ovcon Ltd – key employees

11 Company Profile: Group Five Ltd
11.1 Group Five Ltd – Company Overview
11.2 Group Five Ltd – Business Description
11.3 Group Five Ltd – Main Products and Services
11.4 Group Five Ltd – Company Information
11.4.1 Group Five Ltd – key competitors
11.4.2 Group Five Ltd – key employees

12 Company Profile: Basil Read Holdings Ltd
12.1 Basil Read Holdings Ltd – Company Overview
12.2 Basil Read Holdings Ltd – Business Description
12.3 Basil Read Holdings Ltd – Main Services
12.4 Basil Read Holdings Ltd – History
12.5 Basil Read Holdings Ltd – Company Information
12.5.1 Basil Read Holdings Ltd – key competitors
12.5.2 Basil Read Holdings Ltd – key employees

13 Market Data Analysis
13.1 Construction Output and Value Add
13.1.1 Construction output by project type
13.1.2 Construction output by cost type
13.1.3 Construction output by activity type
13.1.4 Construction value add by project type
13.2 Commercial Construction
13.2.1 Commercial construction output by project type
13.2.2 Commercial construction output by cost type
13.2.3 Commercial construction output by activity type
13.2.4 Commercial construction value add by project type
13.3 Industrial Construction
13.3.1 Industrial construction output by project type
13.3.2 Industrial construction output by cost type
13.3.3 Industrial construction output by activity type
13.3.4 Industrial construction value add by project type
13.4 Infrastructure Construction
13.4.1 Infrastructure construction output by project type
13.4.2 Infrastructure construction output by cost type
13.4.3 Infrastructure construction output by activity type
13.4.4 Infrastructure construction value add by project type
13.5 Institutional Construction
13.5.1 Institutional construction output by project type
13.5.2 Institutional construction output by cost type
13.5.3 Institutional construction output by activity type
13.5.4 Institutional construction value add by project type
13.6 Residential Construction
13.6.1 Residential construction output by project type
13.6.2 Residential construction output by cost type
13.6.3 Residential construction output by activity type
13.6.4 Residential construction value add by project type

14 Appendix
14.1 What is this Report About?
14.2 Definitions
14.3 Summary Methodology
14.4 Methodology
14.5 Contact Timetric
14.6 About Timetric
14.7 Timetric’s Services
14.7.1 Core capabilities include:
14.8 Disclaimer

Table 1: Project 1 – TMM - Tshwane Municipal Headquarter Building - Gauteng
Table 2: Project 2 – FRB/OM - Portside Office Tower - South Africa
Table 3: Project 3 – Hyprop - Rosebank Mall Rehabilitation - Johannesburg
Table 4: Project 1 – KIO - Integrated Steel Plant - South Africa
Table 5: Project 2 – RMI - Saldanha Rare Metals Processing Complex - South Africa
Table 6: Project 3 – CMC - Harrismith Vehicle Manufacturing Plant - Free State Province
Table 7: Project 1 – SADOT - Johannesburg to Durban High Speed Rail Link - South Africa
Table 8: Project 2 – Transnet - Durban Dig Out Port - KwaZulu-Natal
Table 9: Project 3 – TFR - Waterberg Rail Link Expansion - South Africa
Table 10: Project 1 – GPG - CHB Academic Hospital Revitalization - South Africa
Table 11: Project 2 – KZNDoH - Dr Pixley ka Seme Regional Hospital Development - KwaZulu-Natal
Table 12: Project 2 – NMCHT - Johannesburg Nelson Mandela Children Hospital - Gauteng
Table 13: Project 1 – WCMI - Plettenberg Bay Waterfront Development: Residential - Western Cape
Table 14: Aveng Ltd, Key Facts
Table 15: Aveng Ltd, Main Products and Services
Table 16: Aveng Ltd, History
Table 17: Aveng Ltd, Key Employees
Table 18: Murray & Roberts Holdings Ltd, Key Facts
Table 19: Murray & Roberts Holdings Ltd, Main Services
Table 20: Murray & Roberts Holdings Ltd, History
Table 21: Murray & Roberts Holdings Ltd, Key Employees
Table 22: Wilson Bayly Holmes-Ovcon Ltd, Key Facts
Table 23: Wilson Bayly Holmes-Ovcon Ltd, Main Products and Services
Table 24: Wilson Bayly Holmes-Ovcon Ltd, History
Table 25: Wilson Bayly Holmes-Ovcon Ltd, Key Employees
Table 26: Group Five Ltd, Key Facts
Table 27: Group Five Ltd, Main Products and Services
Table 28: Group Five Ltd, Key Employees
Table 29: Basil Read Holdings Ltd, Key Facts
Table 30: Basil Read Holdings Ltd, Main Services
Table 31: Basil Read Holdings Ltd, History
Table 32: Basil Read Holdings Ltd, Key Employees
Table 33: South African Construction Output by Project Type (ZAR Million), 2008–2012
Table 34: South African Construction Output by Project Type (ZAR Million), 2012–2017
Table 35: South African Construction Output by Cost Type (ZAR Million), 2008–2012
Table 36: South African Construction Output by Cost Type (ZAR Million), 2012–2017
Table 37: South African Construction Output by Activity Type (ZAR Million), 2008–2012
Table 38: South African Construction Output by Activity Type (ZAR Million), 2012–2017
Table 39: South African Construction Value Add by Project Type (ZAR Million), 2008–2012
Table 40: South African Construction Value Add by Project Type (ZAR Million), 2012–2017
Table 41: South African Commercial Construction Output by Project Type (ZAR Million), 2008–2012
Table 42: South African Commercial Construction Output by Project Type (ZAR Million), 2012–2017
Table 43: South African Commercial Construction Output by Cost Type (ZAR Million), 2008–2012
Table 44: South African Commercial Construction Output by Cost Type (ZAR Million), 2012–2017
Table 45: South African Commercial Construction Output by Activity Type (ZAR Million), 2008–2012
Table 46: South African Commercial Construction Output by Activity Type (ZAR Million), 2012–2017
Table 47: South African Commercial Construction Value Add by Project Type (ZAR Million), 2008–2012
Table 48: South African Commercial Construction Value Add by Project Type (ZAR Million), 2012–2017
Table 49: South African Industrial Construction Output by Project Type (ZAR Million), 2008–2012
Table 50: South African Industrial Construction Output by Project Type (ZAR Million), 2012–2017
Table 51: South African Industrial Construction Output by Cost Type (ZAR Million), 2008–2012
Table 52: South African Industrial Construction Output by Cost Type (ZAR Million), 2012–2017
Table 53: South African Industrial Construction Output by Activity Type (ZAR Million), 2008–2012
Table 54: South African Industrial Construction Output by Activity Type (ZAR Million), 2012–2017
Table 55: South African Industrial Construction Value Add by Project Type (ZAR Million), 2008–2012
Table 56: South African Industrial Construction Value Add by Project Type (ZAR Million), 2012–2017
Table 57: South African Infrastructure Construction Output by Project Type (ZAR Million), 2008–2012
Table 58: South African Infrastructure Construction Output by Project Type (ZAR Million), 2012–2017
Table 59: South African Infrastructure Construction Output by Cost Type (ZAR Million), 2008–2012
Table 60: South African Infrastructure Construction Output by Cost Type (ZAR Million), 2012–2017
Table 61: South African Infrastructure Construction Output by Activity Type (ZAR Million), 2008–2012
Table 62: South African Infrastructure Construction Output by Activity Type (ZAR Million), 2012–2017
Table 63: South African Infrastructure Construction Value Add by Project Type (ZAR Million), 2008–2012
Table 64: South African Infrastructure Construction Value Add by Project Type (ZAR Million), 2012–2017
Table 65: South African Institutional Construction Output by Project Type (ZAR Million), 2008–2012
Table 66: South African Institutional Construction Output by Project Type (ZAR Million), 2012–2017
Table 67: South African Institutional Construction Output by Cost Type (ZAR Million), 2008–2012
Table 68: South African Institutional Construction Output by Cost Type (ZAR Million), 2012–2017
Table 69: South African Institutional Construction Output by Activity Type (ZAR Million), 2008–2012
Table 70: South African Institutional Construction Output by Activity Type (ZAR Million), 2012–2017
Table 71: South African Institutional Construction Value Add by Project Type (ZAR Million), 2008–2012
Table 72: South African Institutional Construction Value Add by Project Type (ZAR Million), 2012–2017
Table 73: South African Residential Construction Output by Project Type (ZAR Million), 2008–2012
Table 74: South African Residential Construction Output by Project Type (ZAR Million), 2012–2017
Table 75: South African Residential Construction Output by Cost Type (ZAR Million), 2008–2012
Table 76: South African Residential Construction Output by Cost Type (ZAR Million), 2012–2017
Table 77: South African Residential Construction Output by Activity Type (ZAR Million), 2008–2012
Table 78: South African Residential Construction Output by Activity Type (ZAR Million), 2012–2017
Table 79: South African Residential Construction Value Add by Project Type (ZAR Million), 2008–2012
Table 80: South African Residential Construction Value Add by Project Type (ZAR Million), 2012–2017
Table 81: Timetric Construction Market Definitions

Figure 1: Growth Matrix for Construction Output in South Africa
Figure 2: South African Economic Outlook, 2008–2017
Figure 3: South African Construction – Real Gross Value Added (% ann), 2008–2012
Figure 4: South African Mortgage Advances (ZAR Million), 2004–2012
Figure 5: South African Residential Property Prices (2007=100), 2010–2012
Figure 6: Benchmarking with Other Major Construction Industries
Figure 7: South African Population (Million), 2008–2017
Figure 8: South African Commercial Construction Output (US$ Million), 2008–2017
Figure 9: South African Industrial Construction Output (US$ Million), 2008–2017
Figure 10: South African Infrastructure Construction Output (US$ Million)
Figure 11: South African Institutional Construction Output (US$ Million), 2008–2017
Figure 12: South African Residential Construction Output (US$ Million), 2008–2017
Figure 13: South African Construction Output by Project Type (ZAR Million), 2008–2017
Figure 14: South African Construction Output by Cost Type (ZAR Million), 2008–2017
Figure 15: South African Construction Output by Activity Type (ZAR Million), 2008–2017
Figure 16: South African Construction Value Add by Project Type (ZAR Million), 2008–2017
Figure 17: South African Commercial Construction Output by Project Type (ZAR Million), 2008–2017
Figure 18: South African Commercial Construction Output by Cost Type (ZAR Million), 2008–2017
Figure 19: South African Commercial Construction Output by Activity Type (ZAR Million), 2008–2017
Figure 20: South African Commercial Construction Value Add by Project Type (ZAR Million), 2008–2017
Figure 21: South African Industrial Construction Output by Project Type (ZAR Million), 2008–2017
Figure 22: South African Industrial Construction Output by Cost Type (ZAR Million), 2008–2017
Figure 23: South African Industrial Construction Output by Activity Type (ZAR Million), 2008–2017
Figure 24: South African Industrial Construction Value Add by Project Type (ZAR Million), 2008–2017
Figure 25: South African Infrastructure Construction Output by Project Type (ZAR Million), 2008–2017
Figure 26: South African Infrastructure Construction Output by Cost Type (ZAR Million), 2008–2017
Figure 27: South African Infrastructure Construction Output by Activity Type (ZAR Million), 2008–2017
Figure 28: South African Infrastructure Construction Value Add by Project Type (ZAR Million), 2008–2017
Figure 29: South African Institutional Construction Output by Project Type (ZAR Million), 2008–2017
Figure 30: South African Institutional Construction Output by Cost Type (ZAR Million), 2008–2017
Figure 31: South African Institutional Construction Output by Activity Type (ZAR Million), 2008–2017
Figure 32: South African Institutional Construction Value Add by Project Type (ZAR Million), 2008–2017
Figure 33: South African Residential Construction Output by Project Type (ZAR Million), 2008–2017
Figure 34: South African Residential Construction Output by Cost Type (ZAR Million), 2008–2017
Figure 35: South African Residential Construction Output by Activity Type (ZAR Million), 2008–2017
Figure 36: South African Residential Construction Value Add by Project Type (ZAR Million), 2008–2017