Modern Quarrying July-August 2016

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AROUND THE INDUSTRY
Tough economic times ahead
The Consulting Engineers South Africa (CESA) Bi-annual
Economic and Capacity Survey for the period July to
December 2015, just released, indicates that times are
tough and getting tougher with industry confidence the
lowest in 16 years. The report indicates that the consulting
engineering industry will have to adapt to a low growth
environment as the outlook for infrastructure spending is
hampered by poor economic growth, lower than expected
revenue by government, international economic instability
and price volatility, and low private sector confidence.
Three key factors continue to influence the global
outlook: the gradual slowdown and rebalancing of the
Chinese economy; lower prices for energy and other com-
modities; and the gradual tightening of US monetary pol-
icy. GDP growth in South Africa slowed to 0,6% q-q, from
0,7% q-q in the previous quarter. South African economic
growth slowed from 1,5% y-y in 2014 to 1,3% in 2015.
Growth was largely dragged down by a further contrac-
tion in the agriculture sector while construction recorded
marginal growth of 1,1% in the fourth quarter (from 0,5%
in the previous quarter).
According to CESA CEO Chris Campbell, “government
needs a strong focus on the implementation of more of its
strategic infrastructure projects as detailed in the National
Development Plan in order to mitigate the decline in the
economy and improve investor confidence.” He further
reiterates that engineers in South Africa stand ready to
partner with government in eradicating the leakage from
the fiscus, “not only through water which does not reach
domestic households, but also through poorly spent mon-
ies or corrupt practices which have led to payment for poor
quality and even non-existent services in the infrastructure
space.”
On industry challenges, Campbell says procurement
is the biggest challenge. “A further challenge to industry
is to find a way to standardise the procurement proce-
dures applied by the different government departments.
Procurement procedures should be standard for the coun-
try, or at least for the specific tier of government,” he adds.
CESA CEO Chris
Campbell believes
there are tough times
ahead for the consulting
engineering industry.
Visit for a copy of the
CESA Bi-annual Economic and Capacity Survey.