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24 October 2022

Supplied by SHA Risk Specialists

The latest Afrimat Construction Index (ACI) revealed that South Africa’s construction sector increased the value it added to the economy by 4.1% in real terms during Q2 2022, an impressive boost when compared with the marginal 2.4% increase in Q1 2022. numeracy skills.

This growth will be further supported by the economic recovery and rebuilding plan announced by President Ramaphosa, which will go a long way in aiding the recovery of the sector and the creation of employment opportunities.

This is according to Koketso Shabalala, Underwriting Head of Construction and Single Projects at SHA Risk Specialists, who warns that “despite the massive positive impact that the plan will have on the sector, it will not come without risks and its own set of challenges. “

Shabalala explains that a key focus of the recovery and restructure plan is around a massive infrastructure rollout through a robust pipeline of infrastructure projects, which is of course positive news for the construction industry. “We have already witnessed a surge in optimism from construction companies based on this positive sentiment. 

With this growth, comes increased pressure and the expedition of projects. Additionally, the shortening of timelines to deliver projects in a more time-effective manner, which may have an impact on the quality of work delivered and an increase in human error, explains Shabalala.

He further adds that the construction and engineering sector has also observed a shrinking workforce and the loss of skilled labor, which may put additional pressure on the existing workforce when it comes to delivering these pipeline projects timeously and at a high-quality. “This means that there will be a greater need for contractors to share work and sub-contract some of their functions on their projects, which will provide smaller to medium contractors with the opportunity to grow and more importantly create employment opportunities within the sector.

“We’ve noted in the past that with some sub-contracted work, there is a chance that some of the controls that are present at main contractor level may not necessarily be present at sub-contractor level. We may see an increase of defective workmanship claims, injury or damage to third party property during the execution of these expedited projects. With that being said we encourage clients to obtain and maintain the adequate cover not only to satisfy contract requirements but to adequately protect their liability exposures, while implementing the adequate risk management standards that would mitigate any such exposures.

“However, we at SHA will endeavour to support our clients as best as possible, as we understand that they are in a rebuilding phase. In conclusion, spirits are high in the construction sector, as this sector will be at the centre of the rebuilding of the country’s infrastructure and ultimately, the economy too,” he concludes.

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