Wessels was, on Thursday, joined by political
analyst Aubrey Matshiqi and AfriSam sales and marketing executive Richard Tomes at a
briefing post Tito Mboweni’s delivery of
his 2019 Budget speech on Wednesday.
Matshiqi called on South Africa to
“maintain a ray of hope”, even though he expected the uncertainty would likely
continue for the next five years.
With political and policy uncertainty acting as
constraints, Tomes said that, should this continue, the construction sector
would be adversely affected, especially considering that the sector relied
heavily on policy and political certainty, which could impact on long-term
However, looking ahead, he believed the resolution
of certain issues could see the market turn again, with a growing confidence in
the private sector with regard to investments in the industry.
Referring to Mboweni’s Budget speech, Jammine
highlighted that the strong infrastructural investment drive, the will shown to
improve the quality of education, as well as
the improved governance and management of State-owned entities (SoEs) were
“steps in the right direction” towards achieving GDP growth and job
However, Tomes said “there isn’t much to suggest
that we’re going to see a quick upturn in terms of real spend”.
The National Treasury had, on Wednesday, announced
that it would be reprioritising resources towards
President Cyril Ramaphosa’s infrastructure fund, and
that it would be injecting R100-billion into the fund over the next decade.
Despite this being a positive initiative, Tomes
noted that the construction industry
was not “much more encouraged than a year ago”. Considering the low confidence
levels in the sector, he believes it will still be a while before the industry
starts to see the results of this investment.
Currently, there is not enough confidence in the
sector to encourage capital investment, Jammine added.
Tomes remains confident that the industry “has
bottomed out”. He anticipates that, moving forward, companies will become more
competitive in striving to remain afloat.
Until we start to see some big civil projects coming
through . . . companies will be under strain for a while.”
Of these initiatives, he highlighted AfriSam’s business restructuring,
the removal of inefficient capacity, as well as the removal of some fixed
costs. “But overall, there is way too much capacity and oversupply of cement,” he said,
adding that imports were exacerbating the problem.
However, he warned that SoEs still posed a major risk and that these were key to unlocking growth in the construction industry. http://www.engineeringnews.co.za/article/afrisam-expects-tough-2019-amid-continuing-political-policy-uncertainty-2019-02-21