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Why You Should Consider Investing In The South African Engineering Industry

31st May 2023

     

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Macrotrends put South Africa’s population at 60,414,495 in 2023, a 0.87% increase from the previous year. This increase in population sustains the relevance of the simple thesis – the demand for infrastructure increases with an increase in population. 

Simply put, more houses need to be built, and roads and efficient transport systems need to be designed to facilitate the mass movement of people. Likewise, safe and hygienic food needs to be produced in mass to feed the increasing population. These are problems that need the unique problem-solving skills of engineers. 

South Africa is also rich in natural resources including gold, diamonds, iron, silver, titanium, and manganese that require special engineering skills to exploit. Engineers can invest directly, or consult for corporations and governments in South Africa.  Here are the reasons why you should consider investing in the South African engineering industry.

A Growing Construction Industry

The South African construction industry is expected to see a 5.0% growth in 2023. Even though South Africa’s short-term growth has been hit, its medium and long-term growth projection hold. It is estimated to grow steadily in 2023 and keep the momentum through to 2027. During this period, it is expected to grow by 5.8%. According to updates in South Africa Construction Industry Databook Series - Market Size & Forecast by Value and Volume, Q1 2023, the output in South Africa’s construction is estimated to hit ZAR 276,797.9m in 2027.

The growth in construction is forecasted to come from different sectors of construction including healthcare construction, public sector, educational construction, redevelopment & maintenance, commercial green building, commercial building construction, residential building construction, industrial green building construction, infrastructure construction, institutional green building, and green infrastructure construction. Engineers can invest in any of these construction sectors either directly as a contractor or as a consultant for construction companies operating in South Africa. 

As an engineering consultant, you can design client projects according to international standards while observing South African policy demands. You can also invest as an engineering technical service provider. Here, you’ll undertake client projects as a contractor or serve as a project manager to oversee the construction works for the client. You will also liaise with the consulting engineer on behalf of your client in the course of the construction work.

Opportunities in the Mining Sector

South Africa’s mineral reserves still stand as one of the most valuable in the world today with an estimated value of USD 2.5 trillion (R 20.3 trillion). Generally, South Africa’s mining sector is approximated to be the 5th largest globally based on GDP. As such, it offers numerous investment opportunities to engineers. Some of the highest paying jobs are still within the mining sector. There are multiple ongoing mining projects in South Africa that you can invest in depending on the stages of a project’s life cycle. These stages include:

Grassroots

Activities in this stage are done in areas that are under-explored to determine the usefulness of the orebody (prospective or not)

Pre-feasibility

The collection of valuable strategic data/information is done at this stage. This information is useful to long-lead and equipment manufacturers as it aids in the planning, control, and management of product lines.

Feasibility

Resource improvement is done in this stage. It involves determining the best processes, planning, and selecting the equipment to use. It is also at this stage that tendering process happens. Contracting of engineers and engineering consultants also happens in this stage (the engineering procurement construction (EPC) and procurement construction management (EPCM))

Other stages include bankable, execution, operational, dormant, dormant L/R, closed, and completed.

Engineers can invest in all these stages. Some of the engineering opportunities in all the mining stages include:

  • Civil works
  • Perimeter drilling
  • Engineering survey
  • Geophysical survey
  • Process method planning
  • Design and consulting
  • EPCM and EPC
  • Construction
  • Infrastructure building
  • Process plant construction
  • Shaft-sinking
  • Refurbishment
  • Maintenance, repairs, and replacement services
  • Environmental impact assessment

The construction and mining sector in South Africa provides immense engineering investment opportunities. These opportunities are likely to increase with the changing demographics of South Africa and increased demand for South Africa's high-value natural resources. Identifying an opportunity in either construction or any mining stage and exploiting it can yield high dividends in the medium and long term.

Edited by Creamer Media Reporter

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