Conditions still challenging, but contractors report noticeable uptick – MBA North

10th May 2024

By: Irma Venter

Creamer Media Senior Deputy Editor


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Last year was one of the most challenging years the Master Builders Association (MBA) North has ever experienced, with many of its long-standing members entering business rescue or closing their doors, says MBA North executive director Mohau Mphomela.

The 120-year-old employers’ body serves the construction industry in Gauteng, North West, Limpopo and Mpumalanga. Many of its members are smaller, family-owned businesses.

However, it’s not all bad news.

“The challenges continue, but there are some indications that the outlook could be turning more favourable,” says newly elected MBA North VP Gavin Morrow.

“Word from colleagues in the industry is that there is a noticeable uptick in the number of tenders out there, which is obviously good news for principal contractors and subcontractors alike. However, we are also hearing that tenders are slow to be awarded.”

Morrow believes that demand from the emerging middle class has the potential to drive demand for new construction projects, with a strong focus on residential estates.

Other growth drivers include the logistics sector, which is picking up the slack caused by the implosion of Transnet and, therefore, expanding its network of warehouses and depots.

Morrow adds that continued high demand for student housing is also driving the market.

“The private sector has spotted the opportunity, with investments also coming from the big pension funds,” he says.

“In addition, there’s a lot of cash in the economy and the potential lowering of interest rates this year could also play a positive role in stimulating new business.”

Morrow notes that the construction mafia continues to pose an “enormous challenge” for contractors, with scant protection from the police or assistance from clients.

“Clients have put themselves at arm’s length from what is quite a messy situation in order to reduce their project risk, so contractors really are on their own as their project risk increases.

“Dealing with construction mafias adds costs that are difficult to pass on to clients, even though margins are still very thin.

“At the moment, there seems to be no political will to resolve this crisis, despite the regular promises from various political leaders,” says Morrow.

“But contractors are learning how to deal with these potentially explosive situations, and building genuine community engagement is key.”

Morrow adds that he is keen to see MBA North take the lead in ensuring industry players engage with each other about issues of pressing mutual concern.

“The industry has become atomised – we need a united voice on many fronts.

“Some of these issues are transport and logistics challenges, including slow transit through ports, the aforementioned construction mafia, and the need for integrated training initiatives to counter a persistent skills deficit.

“The future is uncertain, but we must do what we can to shape it,” says Morrow.

“We look forward to helping MBA North play an even more important and constructive role in uniting the whole construction value chain and making its concerns heard.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor



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