Civil Engineering May 2021 | Vol 29 No 4

Civil Engineering May 2021 43 Low capacity utilisation in manufacturing sector a concern Persistent low levels of capacity utilisation in the manufacturing sector and low demand for locally manufactured goods are worrying as Covid-19 restrictions continue to limit operations at industrial plants, says the Steel and Engineering Industries Federation of Southern Africa (SEIFSA). New data released by StatsSA show that total capacity utilisation was 74% in Q1 of 2021 compared with 77.5% in Q1 of 2020, representing a 3.5% decrease. Within the Metals and Engineering (M&E) sector, capacity utilisation was marginally down to 76.1% in Q1 of 2021 from 76.8% in Q1 of 2020. This was mainly due to insufficient demand, with maintenance and shortages of raw material such as oxygen and steel also contributing. Overall, the manufacturing sector remains weak in terms of production patterns, with a year-to-date production decline of 3.1% in February 2021. Manufacturing has remained under pressure for some time, with data depicting a low annual average production growth rate of 0.1% in the last four years to 2019, coupled with a massive decline of 13.7% in 2020. Weak manufacturing production amid the lockdown regulations contributed to the economy contracting by 7% in 2020. “Covid-19 significantly hampered production last year. However, there are encouraging signs of a slight recovery as evidenced by Absa’s Manufacturing PMI, which is in an expansionary trajectory of above 50, even though there was marginal decline from 57.4 in March to 56.2 in April,” says SEIFSA Chief Economist Chifipa Mhango. “We do, however, reiterate that any recovery in manufacturing production will be driven by the government’s efforts to revive the economy. It is, therefore, critical that the government speeds up the implementation of its economic recovery plan,” he continues. The M&E sector is heavily reliant on demand from key govern- ment infrastructure projects to boost its production and sales, especially for products such as steel and other related downstream products such as roofing material. An increased level of industrial domestic demand is therefore required for manufacturers to reboot capacity utilisation levels to above 80%.  SEIFSA is concerned about weak manufacturing production Routine road maintenance well underway in Gauteng Demonstrating progress on routine road maintenance (RRM) in Gauteng, SANRAL has announced the appointment of the Ndodana/Oarona Joint Venture as the consulting engineers as well as VEA Road Maintenance and Civils (VEA) as the main contractor across all three metros, with tenders for sub-contractors expected to be put out within the next six months. This work follows several Taking SANRAL to the People stakeholder engagement sessions hosted in Gauteng during 2020. These engagements were targeted at local small, medium and micro enterprises (SMMEs) as well as local com- munities to showcase available opportuni- ties on upcoming projects. SANRAL has four RRM contracts within the Gauteng province, each of which will run for 36 months, after which new routine maintenance contracts will be put in place, explains Oakley van Eyk, SANRAL’s Project Manager for RRM within Gauteng. The first contract is in Tshwane, covering approximately 185 km, including the N4 Sections 1, 11 and 12, and N1 section 21. RRM will also be done to R21 section 2, R104 section 1 and 2, as well as the R573 section 1, commonly known as Moloto Road. The second contract is in Johannesburg and will see 110 km of the following national routes undergoing maintenance: N1 sections 19 and 20, N3 section 12, N12 section 18 and N17 sections 1 and 2. The third contract falls under the Ekurhuleni metropolitan area where approximately 215 km of road network is being maintained including the R21 sec- tions 1 and 2, N12 sections 18 and 19, N3 sections 11 and 12 as well as N17 section 2. The fourth contract for the Merafong Municipality within the West Rand District Municipality covers approxi- mately 151.3 km and includes the N12 Section 17, R500 Section 1, R54 Section 1, R501 Section 3, and N14 Section 13. VEA will be responsible for devel- oping and issuing tender packages for sub-contracting opportunities where local SMMEs can submit their business profiles for consideration. Currently SANRAL expects approximately 18 to 22 sub-contractor packages to be put out to tender per RMM contract. During the period of the contract, accredited trainers will undertake various training programmes with the sub-contractors. An appointed mentor will also be available on site to assist sub-contractors and keep a record of performance. “SANRAL wants to improve the sub-contractor’s performance, offer skills transfer and make sub-contractors more equipped and profitable to grow their profile as entrepreneurs during this process,” says Van Eyk.  SANRAL is developing tender packages for Gauteng road maintenance projects