‘Pandemic pause’ sharpens construction sector’s mind

South Africa’s economy could tumble by more than 14% in 2020 as Covid-19 ramps up, with construction among the hardest hit sectors.

Cobus Bedeker, MD of Evergreen Construction, predicts that business recovery might take six or more years, but the building industry will lag behind other sectors as each slowly moves towards pre-pandemic prosperity.

He said the crisis could result in year-on-year contraction of 18% in the construction sector, which represents 4% of South Africa’s GDP.

“According to construction market intelligence firm Industry Insight, the impact of the coronavirus on the construction sector will be catastrophic, unlike any economic shock the sector has previously had to endure, and will result in it shedding an estimated 120,000 to 140,000 formal jobs.

"[Building and construction] have been touted as one of the key sectors the government should prioritise to ramp up job opportunities in an effort to revive the SA economy.” 

He said President Cyril Ramaphosa, in a recent address at the opening of the Sustainable Infrastructure Development Symposium of SA, acknowledged that even before the pandemic the dwindling infrastructure spend had caused hardship.

In a survival gambit, the industry formed the Construction Sector Covid-19 Task Team, comprising contractors and subcontractors, built environment firms, property developers, manufacturers, professional associations and regulators.

It has submitted short- to medium-term health and safety plans, including personal protective equipment (PPE) adherence and the monitoring to government.

Bedeker predicts the number of workers per site will be minimised to control social distancing requirements, while ensuring construction project milestones and timelines are adhered to.

What Bedeker terms “the pandemic pause” has sharpened developers’ minds about the future; they are relooking their designs, sales methods and the way their buildings and developments will function.

Jeremy Lang, regional GM at Business Partners, said as restrictions eased, resuming operations would not be enough for survival considering the economy.

“While swift adaptation is essential, companies will need to reimagine many parts of their operations. Business models that worked well in the past may not work at all today.

“Business owners need to not only adapt to the new normal, but use this as an opportunity to future-proof their operations.”

There was, he said, an alarming prediction from the SA SME Finance Association that 75% of small and micro businesses might  be forced to close down if the lockdown ran past July.

Lang cited a recent McKinsey feature that suggested four strategic areas for businesses to focus on during this critical period of transition.

“In order to not only survive, but come back stronger than before, businesses should focus on rapidly recovering revenue, rebuilding operations, rethinking their organisation and accelerating the adoption of digital solutions.”

He said SA was faced with a unique set of challenges that needed to be tackled in a uniquely SA manner.

“We entered the lockdown with a struggling economy and experienced some of the strictest lockdown conditions in the world, so our economy will likely emerge from this period very differently to others.

“It’s also still very unclear as to when SA will experience its Covid-19 infection peak, with many predicting this to occur as late as September.

“With that said, businesses will need to plan as best possible for the months ahead, but remember to remain agile and adapt as the situation shifts.”