November 2013
CONSTRUCTION WORLD
8
Consulting Engineers South Africa’s latest Bi-annual Economic and
Capacity Survey (BECS) – January to June 2013, indicates conditions
in the first six months of 2013 were not as bad as expected,
considering the better than expected increase in earnings,
alongside a healthy increase in employment.
marketplace
THE INDUSTRY CONTINUES
to have to
adapt to a lowgrowth environment as the
outlook for infrastructure spending con-
tinues to be hampered by poor economic
growth, lower than expected revenue by
government, international economic insta-
bility and price volatility, and low private
sector confidence.
"We shall continue to track the eco-
nomic activity of the country via this
economic and capacity reporting tool
for our member's benefit. CESA intends
to be the advisor of choice to the three
tiers of Government in order to harness
and harmonise the Consulting Engineer-
ing service for the benefit of quality of
service to the nation at large, bearing
in mind global standards as set by the
International Federation of Consulting
Engineering (FIDIC) of whom CESA is a
member”, states Lefadi Makibinyane, CESA
CEO. “The way that infrastructure projects
are planned and packaged requires a
concerted effort by Government and the
inclusion of Consulting Engineering firms
at this initial planning stage need to be
emphasised”, he contends. Makibinyane
continues by stating that going forward,
“CESA shall share the strategy of how to
achieve this with Government and SOE's
through continuous bilateral meetings”.
Industry confidence
In spite of this confidence levels improved
by 20% to a level of 84 (compared to an
expected 76), and is expected to be relatively
stable in the next 12 months, with a slightly
better outlook for the industry in the first
six months of 2014. The confidence index
increased to an expected level of 94 for
June 2014. It just did not materialise into the
expected earnings.The relationship between
confidence levels of consulting engineers
and civil contractors deteriorated from 2009
onwards, as consulting engineers seem to
remain busy, while work opportunities for
civil construction deteriorated, or otherwise
put, could not keep up with the pace ex-
perienced during the pre-2010 World cup
preparation phase. That trend between con-
fidence levels amongst consulting engineers
and contractors has however shown some
improvement, as contractors are slightly
more optimistic. Confidence in the consulting
engineering sector generally lags business
sentiment. Business sentiment recovered
to a level of 50 (neutral) but is unlikely to be
sustained or even improve considering the
current economic turmoil in terms of the
expected negative impact of strike action
during themonth of August on the economy.
Continued on page 10
Economic growth on par
with expectations
CESA CEO, Lefadi Makibinyane.
Fee income
Member firms’ fee income earned ac-
celerated at a faster pace than expected
in the first six months of 2013, after
slowing down in the last half of 2012 but
that real annual fee earnings are lower
on the back of higher inflation. Added to
this approximately 9,9% of fee earnings
were outstanding for longer than 90 days,
compared to 8,3% in the December 2012
survey and 24 percent in December 2011.
This translates to an estimated R2-billion
outstanding in fee earnings.
Human resources
There was a notable increase in employ-
ment during the first six months of 2013.
Employment increased by 22% to an esti-
mated 24 356 as at June 2013 translating
into a positive outlook for the recruitment
of engineers. The employment of African
(Black, Coloured and Asian) professional
engineers increased by 14% in the first
six months compared to the December
2012 survey. The appointment of African
unregistered engineers however fell by 8%.
Trying to conform to BBBEE requirements,
means demand for black engineers will
continue to put pressure on firms, as there
are simply not enough black engineers
available to fill those positions.
Industry equity
Black (including Asian and Coloured)
equity, including executive directors,
non-executive directors, members and
partners, increased to 35,5% from 30,1%
and 28,1% in the previous two surveys.This
shows real significant progress in terms of
industry transformation.Women (including
all races) represented 8,3% of total equity,
compared to 7% in the June 2012 survey.
Capacity utilisation
Capacity levels improved in the June 2013
survey to 91% deteriorating to a level of
87% in the previous two surveys. A level
of 91% is so far the highest level reported
by participating firms since the December
2008 survey when it was at 95%.
