Civil Engineering May 2021 | Vol 29 No 4

38 May 2021 Civil Engineering This article outlines the structure of the South African construction industry, the framework for procurement, chal- lenges within the industry, the state of the contracting business, and the way forward. The key consideration is what the construction industry is going to look like in the post-Covid-19 era. This question will be addressed from the perspective of construction business and project delivery environments in the Global South. STRUCTURE AND SIZE OF THE SOUTH AFRICAN CONSTRUCTION INDUSTRY The construction sector is one of South Africa’s largest industries and affects both economic and social aspects of our economy (Ofori and Toor, 2012). In addition to providing employment to highly educated technical experts as well as wage-earning labourers, the industry makes a significant contribution to South Africa’s GDP. In 2013 the construction industry contributed 13% of GDP, with expectations for an increase to 15% by 2020 (Schilling, 2013). However, a reduction in the industry’s contribution to GDP has been observed. According to StatsSA (2019a), the construction industry contributed R106 790 million to GDP (3.4% of the total GDP) in Q1 2019 and employed more than 1.4 million people. The construction industry’s an- nual GDP contribution had begun to decline prior to Covid-19, driven by a decrease in both public and private construction-related expenditure. The current pandemic has worsened the situa- tion, and the Construction Covid-19 Rapid Response Task Team (CC19RRTT) was set up in response. Following the Covid-19 outbreak in South Africa, GlobalData re- vised the 2020 construction output growth forecast for sub-Saharan Africa to 3.6% (down from the previous projection of 6%) and revised South Africa’s construction output in 2020 to -4.1%. It is also perceived that the negative impact of Covid-19 will compound other challenges, notably high national debt, skilled labour shortages, and limited infrastructure spending amid a depressed economy (CC19RRTT, 2020). FRAMEWORK FOR PROCUREMENT AND CHALLENGES WITHIN THE SECTOR In South Africa, the framework for procure- ment in the public sector is guided by the Public Finance Management Act (PFMA) as well as the Municipal Financial Management Act (MFMA). The PFMA establishes the duties and responsibilities of government officials in charge of finances and aims to se- cure transparency, accountability, and sound financial management in government and public institutions. Subsequently, a Standard for Uniformity (SFU) in construction works has been developed by the Construction Industry Development Board (cidb). Four forms of contract have been adopted under the SFU, namely FIDIC, GCC, JBCC, and NEC. Challenges within the industry that need to be addressed by contracts include: Q Q Construction quality due to procure- ment related barriers Q Q Institutional barriers Q Q Introduction of the National Treasury Standard for Infrastructure Procure- ment and Delivery Management (SIPDM), which contended with the SFU (National Treasury has since repealed the SIPDM and replaced it with the Framework for Infrastructure Future of the construction sector post Covid-19 Marke t I ns i ght Dr Abimbola Windapo Pr CPM, FNIOB Professor of Construction Management University of Cape Town abimbola.windapo@uct.ac.za The Covid-19 pandemic has resulted in massive disruption of supply chains, the bursting of financial bubbles, the decline of oil, and could very well lead the world into another great depression. These economic factors, compounded with the obvious health ones, are also having a great impact on the construction industry.