The industry has been brought to its knees in the past few years by a dearth of major tenders, particularly from the public sector. There is a wide spectrum of work coming out to tender, including solar, water and housing projects, not just road projects. Three Strategic Integrated Projects (SIPs) in KwaZulu-Natal that were gazette last year by government and grew its secured order book by almost 69% to a record R17.1 billion in the year to end-February 2021 from R10.14 billion in the previous year. Supply side constraints is a reference to several major construction groups going into business rescue or disposing of their South African construction businesses due to a lack of work and as part of a restructuring process to try and return these companies to financial health.
Mining will be another cylinder in the engine that will start pumping, particularly as the mining sector globally underinvested during the last five to seven years. Despite the increased tender activity, Metelerkamp believes the health of the construction industry is “still a net negative” and Raubex is definitely not representative of the overall construction sector. Metelerkamp said Raubex is the company most likely to benefit from the projects that have been put out to tender because it is probably the most skilled contractor in that segment. The long-term sustainability of the increased infrastructure activity if the government does not start cutting its expenditure, particularly the public sector wage bill.