CONSTRUCTION MONITOR

 

   

Employment Q3 • 2019

 

 

   

CIDB CONSTRUCTION MONITOR - EMPLOYMENT; OCTOBER 2019

 

 

CIDB CONSTRUCTION MONITOR - EMPLOYMENT; OCTOBER 2019  

 

 

1. Introduction 1 2. Employment in the Construction Industry; Overview 2

2.1 Context 2 2.2 Employment in the Construction Industry (Formal Sector) 2 2.2.1 Construction Formal Employment (Quarterly Labour Force Survey) 2 2.2.2 Construction Formal Employment (Quarterly Employment Statistics) 3 2.2.3 Retrenchments in the construction industry 5 2.3 Employment in the Construction Industry (Informal Sector) 6 2.4 Employment Index; Contractors 8 2.5 Employment in the Consulting Engineering Sector 9 2.6 Gross Fixed Capital Formation in Construction Forecast 11

3. Construction Employment; Provincial Overview 12 4. Composition of Construction Labour Force 15

4.1 Composition by Gender 15 4.3 Composition by Skills Profile 16 4.4 Skills Shortages; Contractors 16

 

 

 

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1. Introduction  

 

The cidb Quarterly Monitors focus on the following themes per quarter:   Quarter 1: Supply & Demand; Quarter 2: Contractor Development; Quarter 3: Employment; and Quarter 4: Transformation.

 This cidb Construction Monitor – Employment (Quarter 3) examines employment in the construction industry and the factors affecting employment.

 Details of employment are obtained from the Quarterly Labour Force Survey1, the Quarterly Employment Statistics2, the cidb SME Business Confidence Survey3 and the Consulting Engineers South Africa (CESA) Bi-Annual Economic and Capacity Survey report4. The employment data includes details of formal and informal construction employment, as well as employment at the national and provincial levels.

 

                                

1 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistic South Africa, www.statssa.gov.za

2 StatsSA (2019). Quarterly Employment Statistics (QES); September 2019, Publication P0277. Statistic South Africa, www.statssa.gov.za

3 cidb (2019). cidb SME Business Conditions Survey, Quarter 3 2019, Construction Industry Development Board, www.cidb.org.za

4 CESA (2019). Biannual Economic and Capacity Survey; January – June 2019. Consulting Engineers South Africa. www.cesa.co.za

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2. Employment in the Construction Industry; Overview  

2.1 Context  

 

In 2019Q3, the South African labour force grew by 2% to 23.1million (2018Q3: 22.6 million). South Africa has a challenge of high unemployment and skills shortages, at the end of 2019Q3, the unemployment rate was 29,1%5, and one of main goals that South Africa has set itself in the National Development Plan is to cut the unemployment rate to 6% by 20306. South Africa has an abundance of low and unskilled labour, a profile of the unemployed presented by Statistics South Africa shows that the unemployment rate is higher amongst the following groups; the youth, individuals that did not complete their secondary education, individuals that completed matric over the period 2009 and 2018, and those without experience. The construction industry is an important player in job creation, not only in the construction sector but in other sectors of the economy. According to Stats SA, the construction industry is one of the industries that have higher employment shares relative to their GDP contribution. The construction industry uses a wide range of inputs (such as construction materials) from many other industries to produce its goods and services7, and as a result the construction industry also contributes indirectly to the jobs that are created across a number of sectors. Sectors that benefit from construction output include manufacturing, mining, transportation, real estate and business services.

 According to Stats SA8, total employment in South Africa has risen from 13,8 million to 16,4 million between the period 2009Q3 to 2019Q3. During this period, the number of employed people increased by 2,6 million and the construction industry is one of the industries that has contributed to this increase by creating 187 000 jobs over this period. However, the increase in employment in the construction and other industries has not been enough to accommodate the new entrants in the labour force over this period, unemployment has been increasing at a higher rate than employment.

 

  

2.2 Employment in the Construction Industry (Formal Sector)  

2.2.1 Construction Formal Employment (Quarterly Labour Force Survey)  

 

Data from the Quarterly Labour Force Survey (QLFS)9 shows that the formal sector (excluding agriculture and private households) employs around 11,2 million people, of which the construction sector accounts for 8% of total formal employment. On a year-on-year basis, the total formal sector employment contracted by (-41 000) for the period 2018Q3 to 2019Q3, while on a quarter-on-quarter basis total formal sector employment increased by 43 000 for the period 2019Q2 to 2019Q3.

 

          

5 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistics South Africa, www.statssa.gov.za

6 The Presidency (2012). National Development Plan 2030: Our future – Make it Work. National Planning Commission, nationalplanningcommission.wordpress.com

7 UK Contractors Group (2009). Construction in the UK Economy: The Benefits of Investment, www.ukcg.org.uk 8 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistics South Africa,

www.statssa.gov.za 9 StatsSa (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistics South South,

www.statssa.gov.za

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Figure 1 |Total Formal Employment by Industry Sector (excluding agriculture)

 For the third quarter of 2019, 62 000 jobs were added quarter-on-quarter, the biggest job gains occurred in community services (56 000), mining (38 000), agriculture (38 000) and private households (35 000). The biggest job losses occurred in the following industries; manufacturing (-30 000), construction (- 24 000), trade (-21 000) and utilities (-18 000), other industries that contributed to job losses are transport (-8 000) and finance (-4 000).

 In the construction industry, based on the Quarterly Labour Force Survey data, formal employment accounts for 64%, while informal employment accounts for 36% of total construction employment. Formal sector employment has been contracting or experience low growth since 2016Q1, in 2016Q3 the construction formal sector employed 1 016 000 people, by 2019Q3 employment in the sector had declined to 856 000 people, a decline of -160 000 or (-16%) in construction formal sector employment. In the shorter term, the construction formal sector contributed 856 000 jobs in 2019Q3, there was a decline of -105 000 jobs or (-11%) in the number of jobs created on a year-on-year basis. On a quarter- on-quarter basis, there was a marginal decline of -10 000 or (-1%) in the number of jobs created. The construction formal sector has grown at a lower rate than the construction informal sector, the average growth rate was 0.2% from the period 2009Q3 to 2019Q3. During this period, the construction formal sector experienced it’s highest peak in employment in 2015Q3 when it had a year-on-year growth of around 17%.

 

  

2.2.2 Construction Formal Employment (Quarterly Employment Statistics)  

 

According to the Quarterly Employment Statistics (QES)10, at the end of 2019Q2 the construction industry employed around 611 315 people in the formal sector, with civil engineering contributing to the bulk of the employment of 368 525 people (60%) and general building contributing around 212 667 (35%), the rest of the employment was for site preparation (1%) and renting of construction equipment with operators (4%). The Quarterly Employment Statistics data indicates that the sector has created around 187 000 jobs in the formal sector between 2009Q3 and 2019Q2, around 101 000 created in the civil engineering sector and 83 000 were created in the general building sector. However, the effect of

 10 StatsSA (2019). Quarterly Employment Statistics; September 2019, Publication P0277. Statistics South

Africa. www.statssa.gvo.za

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the downturn in the industry and lack of demand in the sector are illustrated by the decline in employment or job losses that have occurred in the sector. At the end of 2019Q2, Stats SA Quarterly Employment Statistics figures showed that construction employment declined by -4.9% year-on-year, - 6.5% in civil engineering and -2.5% in general building, -6.2% in site preparations.

 Trends in infrastructure investment (GFCF) and total formal employment are illustrated in figure 2, 3 and 4 below in which GFCF is shown in real terms (2010 Rands), together with the total formal employment obtained from the Quarterly Employment Statistics. It is seen that the total construction spend in 2018 amounted to around R281 billion in 2010 Rands (or R430 billion in nominal Rands), and as at 2018Q4 the sector employed 376 000 in civil engineering, 213 000 in general building (building installation and completion) and a further 31 000 in site preparation and rental of construction equipment (i.e. total employment of 619 000 people).

 

Figure 2 |Gross Fixed Capital Formation in Construction and Formal Employment (QES)  

Figure 3|Investment in Construction Works and Formal Employment in Civil (QES)

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Figure 4 |Investment in General Building (Residential and Non-Residential) and Formal

Employment in General Building (QES)  

A close correlation between GFCF and employment is observed in the above figures.  

  

2.2.3 Retrenchments in the construction industry  

 

The construction sector has been in the doldrums, it’s output has been declining over the past couple of years. It has been experiencing negative or minimal growth since 2010 and again in 2015. This underperformance is as a result of a stagnant economy, declining investment in infrastrucuture by both the private and public sector and deterioration in contracts awarded. The long-term deficiency in economic activity has resulted in decline in construction employment, resulting in major job losses. At 2019Q2 both the Quarterly Labour Force Survey and the Quarterly Employment Statistics reported job losses in the construction formal sector of -11,8% or (-116 000) and -4.9% or (-29 733) respectively on a year-on-year basis.

 According to the CCMA 2018/19 Annual Report (the most recent report available), the construction industry in comparison with other industries, was highly impacted by retrenchments. In the 2018/19 period, the sector recorded 3 584 retrenchments, it had the highest number of retrenched employees, followed by mining and the metal sector11. The SAFCEC Survey also indicates that civil engineering contractors have lost 45% of their workforce over the last 5 years12. Many construction companies have been going through financial difficulties, some have gone through liquidations, some are currently under business rescue. These companies have also had to retrench their employees as part of a restructuring strategy.

        

11 CCMA (2019) CCMA Annual Report 2018/19. Commission for Conciliation, Mediation and Arbitration. www.ccma.org.za

12 SAFCEC (2019) State of the South African Civil Engineering Industry 2019Q2. South African Forum of Civil Engineering Contractors. www.safcec.org.za

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2.3 Employment in the Construction Industry (Informal Sector)  

 

The informal sector employs around 2,8 million people, the largest contributors of jobs in the informal sector are trade (41%), community and social services (16%) and construction (16%). In the construction industry, based on the Quarterly Labour Force Survey data, formal employment accounts for 64%, while informal employment accounts for 36% of total construction employment. The contribution of the construction sector to informal employment is significant, at the end of 2019Q3 around 483 000 job opportunities were created.

 

Figure 5 |Informal Employment by Industry Sector (excluding agriculture)

 

  

The year-on-year growth in the construction industry’s informal employment is shown in the figure 6 and 7 below. Although significant fluctuations are seen on a year-on-year basis, overall there has been a significant growth in construction informal employment between 2009Q3 and 2019Q3. The construction informal sector experienced it’s highest peak in 2018Q3 when it had a robust year-on-year growth of around 31%.

 According to Stats SA13, total informal employment in South Africa has risen from 2,1 million to 2,9 million between the period 2009Q3 to 2019Q3. During this period, the number of job opportunities created increased by 887 000 and the construction industry is one of the industries that has contributed to this increase by creating 207 000 job opportunities over this period. The construction informal sector accounts for around 16% of total informal employment. Over the long term, the contribution of the construction sector to informal sector jobs has grown significantly, in 2009Q3 informal sector jobs in construction were 276 000 and at the end of 2019Q3 there were 483 000 job opportunities in the informal sector – an increase of 207 000 jobs or 75% in the construction industry informal sector. In the shorter term, the construction informal sector contributed 483 000 jobs in 2019Q3. There was a decline of -59 000 or -11% in the number of job opportunities shed on year-on-year from 2018Q3 to 2019Q3. In comparison to the construction formal sector, the construction informal sector has grown at a higher rate. The better performance in the informal sector could also be because of people who might have lost their jobs in the formal sector moving to the informal sector, the sector is becoming a cushion for them. However, it should be noted that when people move into the informal sector, they

  

13 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistics South Africa, www.statssa.gov.za

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do not receive the same level of income and benefits that they received in the formal sector. The expansion of the construction informal sector is not unique to South Africa, and the following conditions have led to the expansion of the informal sector elsewhere in the world; rapid urbanisation combined with low economic growth has increased the number of people unable to access formal jobs, increased competition for work, declining demand and restrictive employment regulations that have led registered contractors to shed permanent employees and replace them with temporary or casual workers14.

  

35%  

30%  

25%  

20%  

15%  

10%  

5%  

0%  

-5%  

-10%  

-15%  

-20%

Total: Informal Construction: Informal

 

Figure 6|Year-on-year Growth in Informal Employment   

35%  

30%  

25%  

20%  

15%  

10%  

5%  

0%  

-5%  

-10%  

-15%  

-20%

Construction: Formal Construction: Informal

 

Figure 7|Year-on-year-Growth in Construction Employment    

14 CIB (2012). New perspectives on construction in developing countries. International Council for Research and Innovation in Building and Construction. www.cibworld.nl

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Construction informal employment has grown at a higher rate compared to construction formal employment and total informal employment, the average growth rate for total informal, construction informal and construction formal employment from 2009Q3 to 2019Q3 is 2,8%, 5% and 0.2% respectively. The informal sector includes the self-employed in micro-businesses that are not registered for income tax or VAT registered, employees with regular employment in formal or informal enterprises who do not receive benefits such as medical aid and pension funds, those that do not contribute to UIF and who do not have written employment contracts, short term employees and casual employees. In the construction industry, the majority of the informal self-employed individuals are mostly micro and small enterprises registered in cidb Grades 1 and 2. The informal self-employed are predominantly in rural provinces such as Limpopo, Mpumalanga and the Eastern Cape as well as urban provinces such as Gauteng and KwaZulu Natal in which the construction or major repairs to own houses is high15. High informal employment in these provinces is also attributed to the following:

  the high unemployment rate in these provinces, the individuals located in these provinces may not

have the experience and skills to be absorbed by the formal enterprises therefore people have to find alternative means other than formal employment to generate an income and to gain experience; and

informal sector construction activities such as constructing , maintaining and repairing individual’s houses is common in these areas.

 The informal sector is lower in the Western Cape which has the lowest unemployment rate (21,5%), it also has the lowest number of construction or major repairs to own houses in comparison to other provinces. Of interest, the Register of Contractors also reflects that there are much more Grade 1 and 2 contractors registered in the five above mentioned provinces than in the Western Cape. The informal sector enterprises comprises mostly of subcontractors and labour only contractors, some of these businesses have linkages with enterprises in the formal sector through subcontracting and providing labour-only services. In terms of skill requirements, the subcontractors and labour only contractors that perform common tasks in the informal sector utilises mostly low skilled and unskilled labourers.

 

  

2.4 Employment Index; Contractors  

 

The cidb SME employment index16 and activity index obtained from the cidb SME Business Conditions survey which covers Grades 3 to 8 cidb registered contractors is shown in figure 8 and 9 below. The Quarterly Labour Force Survey and the Quarterly Employment Statistics both show a decline in formal construction employment, this is supported by the cidb SME employment index which shows a negative net balance – i.e. more contracting enterprises surveyed indicated that they are reducing staff than employing staff. For General Building (GB) the employment index was at it’s lowest level of (-50) in 2017Q3, activity was at its lowest level in 2019Q3 (-62). For Civil Engineering (CE) the employment index was at it’s lowest level in 2019Q2 (-60), activity was at its lowest level in 2018Q3 and 2018Q4. Construction workers get laid off due to a decline in construction activity, the deficiency of demand for their services has created job losses. The rate of labour shedding has been increasing for both General Building (GB) and Civil Engineering (CE) contractors, this correlates with construction activity which has been declining.

      

15 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistics South Africa, www.statssa.gov.za

16 cidb (2019). cidb SME Business Condition Survey; Quarter 3. Construction Industry Development Board, October 2019. www.cidb.org.za

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GB: Growth in activity

 

-10  

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Figure 8|Employment Index (Net Balance) and construction activity: cidb Registered

Contractors (Grades 3 to 8 - GB)  

 

CE: Growth in employment

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CE: Growth in activity

 

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-20  

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Figure 9|Employment Index (Net Balance) and construction activity: cidb Registered

Contractors (Grades 3 to 8 - CE)     

2.5 Employment in the Consulting Engineering Sector  

 

The provision of professional services such as planning, architecture and design, quantity surveying, project planning and management are part of the construction industry value chain. Occupations in the consulting engineering sector include managers, professionals, technicians and associate professionals and clerical support workers. The Stats SA Quarterly Employment Statistics reports on employment in the consulting engineering sector under real estate and business services. As illustrated in figure 10 below, as at 2019Q2 around 94 200 people were employed in the sector. On a year-on-year basis,

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- 3 883 or (-4%) of jobs were shed in the consulting sector. Between 2009Q3 and 2019Q2 the sector added 21 732 jobs or employment grew by 30%. The average annual growth rate for the consulting sector from 2009Q3 to 2019Q3 is 3%.

                       

Figure 10|Employment of Consultants (QES) vs. GFCF  

The Consulting Engineers South Africa (CESA) currently reflects the majority of the larger consulting enterprises, but many small and micro-enterprises are not members of CESA. As illustrated below, CESA members currently employ around 21 002 people17. On a year-on-year basis, -2 932 or (-12%) jobs were shed by CESA members from 2018Q2 to 2019Q2. On a half yearly basis, -3 538 or (-14%) jobs were shed by CESA members from 2018Q4 to 2019Q2. The average annual growth rate for the consulting sector from 2009Q4 to 2018Q4 was 2%.

                       

Figure 11|Employment by Members of CESA vs. GFCF  

    

17 CESA (2019). Bi-Annual Economic and Capacity Survey July - December 2018, at 2018Q4. Consulting Engineers South Africa. www.cesa.co.za

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   2016

 

 2017

GFCF; Rand (Million) 2010 2018 2019f 2020f 2021f

 

 2020f

 2023f

Construction-Total 288 574 284 955 281 020 276 105 272 983 275 435 278 411 282 703

2.6 Gross Fixed Capital Formation in Construction Forecast  

 

The close correlation between GFCF and employment in the contracting and the professional services sectors has been highlighted in Sections 2.2 and 2.5. From 2015 to 2019 the construction sector experienced minimal or negative growth, the average growth rate of Gross Fixed Capital Formation in Construction was (-1%). This also had an impact on the sector’s employment, during the period 2015Q3 to 2019Q3, the sector experienced job losses of -121 000 or (-8%) as reflected by the Quarterly Labour Force Survey. Of concern is that most economic projections forecast a decline in real terms in GFCF over the short to medium term18 – which will result in more job losses over this period.

 Table 1|Gross Fixed Capital Formation in Construction Forecast

 

      % change -2.0% -1.3% -1.4% -1.7% -1.1% 0.9% 1.1% 1.5%

Building   116 431 113 474 109 783 108 293 106 513 107 300 108 932 110 851   % change -0.6% -2.5% -3.3% -1.4% -1.6% 0.7% 1.5% 1.8%

Residential-Building 56 444 57 746 55 871 56 430 55 583 55 861 56 978 58 118 % change -3.9% 2.3% -3.2% 1.0% -1.5% 0.5% 2.0% 2.0%

Non-residential Building 59 987

 

55 728 53 912 51 863 50 930  

51 439  

51 953 52 733 % change 2.7% -7.1% -3.3% -3.8% -1.8% 1.0% 1.0% 1.5%

Construction Works 172 143 171 481 171 237 167 812 166 470 168 134 169 480 171 852 % change -2.9% -0.4% -0.1% -2.0% -0.8% 1.0% 0.8% 1.4%

 

                               

18 Industry Insight (2019). Construction Industry Forecast Report July 2019. Industry Insight. www.industryinsight.co.za

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3. Construction Employment; Provincial Overview  

 

A breakdown of formal and informal employment by province obtained from the StatsSA Quarterly Labour Force Survey (QLFS) is given in the table below.

 Table 2|Provincial contribution to construction employment (*1000)

Provincial contribution to construction employment (*1000) yyyyqq SA EC GP KZ WC NC FS MP LP NW 2019Q3 1339 161 383 238 185 20 46 107 142 562019Q2 1363 147 382 237 214 16 60 109 128 702019Q1 1339 136 375 230 220 18 56 101 137 652018Q4 1481 164 430 244 223 24 58 106 146 872018Q3 1502 172 413 238 233 25 64 115 163 792018Q2 1476 163 419 229 233 24 51 112 150 942018Q1 1431 154 419 211 214 26 59 105 146 962017Q4 1390 146 369 196 227 26 75 107 154 90

 

Of the nine provinces in South Africa, four provinces stand out in terms of their contribution to employment, namely Eastern Cape, Gauteng, KwaZulu Natal and Western Cape which collectively account for around 73% of total formal and informal construction employment. Of these, Gauteng alone accounts for close to 29% of total construction employment.

 Table 3|Provincial contribution to construction employment (%)

Provincial contribution to construction employment (%) yyyyqq SA EC GP KZ WC NC FS MP LP NW 2019Q3 100% 12% 29% 18% 14% 1% 3% 8% 11% 4%2019Q2 100% 11% 28% 17% 16% 1% 4% 8% 9% 5%2019Q1 100% 10% 28% 17% 16% 1% 4% 8% 10% 5%2018Q4 100% 11% 29% 16% 15% 2% 4% 7% 10% 6%2018Q3 100% 11% 28% 16% 16% 2% 4% 8% 11% 5%2018Q2 100% 11% 28% 16% 16% 2% 3% 8% 10% 6%2018Q1 100% 11% 29% 15% 15% 2% 4% 7% 10% 7%2017Q4 100% 10% 27% 14% 16% 2% 5% 8% 11% 6%

 

The dominance of Eastern Cape, Gauteng, KwaZulu Natal and Western Cape in terms of construction employment is a direct reflection of the construction spend by province shown below19.

Table 4|Construction Spend by Province (%) Construction Spend by Province - % (2018Q1 - 2018Q4) Estimates: Industry Insight Database Province Building Civil TotalGauteng 43% 11% 26%Western Cape 16 25% 21%KwaZulu Natal 12% 17% 15%Eastern Cape 15% 15% 15%Limpopo 2% 13% 8%Mpumalanga 6% 6% 6%Free State 3% 5% 4%North West 1% 5% 3%Northern Cape 2% 2% 2%Total 100% 100% 100%

    

19 Industry Insight (2018). Investment Map Monitor. Industry Insight, January 2019, www.industryinsight.co.za

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Quarterly gains and losses in total informal and formal employment by province is given in the table 5 below.

 Table 5|Provincial Employment gains/loses

Quarter-on-quarter gains/losses in construction employment (*1000)  yyyyqq SA EC GP KZ WC NC FS MP LP NW 2019Q3 -24 15 2 1 -29 4 -13 -3 14 -142019Q2 24 10 7 7 -6 -2 4 9 -9 52019Q1 -142 -28 -55 -14 -3 -6 -2 -5 -10 -222018Q4 -21 -8 16 6 -11 -1 -7 -9 -16 8Total -163 -11 -30 0 -49 -5 -18 -8 -21 -23

2018Q3 27 9 -6 9 1 2 13 2 13 -162018Q2 45 10 1 18 18 -2 -8 7 3 -22018Q1 40 8 49 15 -12 0 -16 -2 -8 62017Q4 26 -11 30 -3 -4 5 2 -11 -1 20Total 137 16 74 39 3 4 -9 -4 7 8

 

At the end of 2019Q3, 1 339 000 people were employed in the construction industry. In 2019Q3 the construction industry contributed to job losses in the economy, declining by -24 000 jobs quarter-on- quarter, -10 000 in the formal sector and -14 000 in the informal sector. Construction employment contracted by -1,8% quarter-on-quarter and there was also a year-on-year contraction of -11%. The quarter-on-quarter decline in employment was due to larger contractions in Western Cape, North West and Free State of (-29 000 or -13.7%), (-14 000 or -19.8%) and (-13 000 or -22.4%) respectively. There were job increases in construction employment that were reported in Eastern Cape and Limpopo; (15 000 or 9.9%) and (14 000 or 11.1%) respectively, other provinces reported marginal increases, were Northern Cape (4 000 or 22.3%), Gauteng (2 000 or 0.4%) and KwaZulu Natal (1 000 or 0.5%).

 On a year-on-year basis, (-163 000) jobs were shed in construction employment, -105 000 in the formal sector and -59 000 in the informal sector. The provinces that reported the largest contractions were Western Cape , Gauteng, North West, Limpopo and Free State; (-49 000 or -21%), (-30 000 or -7%), (23 000 or -29%), (-21 000 or -13%) and (-18 000 or -28%) respectively whilst Eastern Cape, Mpumalanga and Northern Cape reported marginal job declines of (-11 000 or -6%), (-8 000 or -7%) and (-5 000 or -20%) respectively. There were no jobs added in any of the provinces on a year-on-year basis. Details of employment for the provinces with the major contributions to construction employment in South Africa are shown in figure 12 to 16 below.

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2017

04 

2017

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Informal  Formal    

1 700  

1 500  

1 300  

1 100  

900  

700  

500  

    

Figure 12|Construction Employment; South Africa (2017Q1 to 2019Q3)  

Total (*1 000)   

200 

  

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0 

Total (*1 000)   

500 

450 

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300 

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Figure 13 |Construction Employment; Eastern Cape Figure 14 |Construction Employment; Gauteng  

 

Total (*1 000)  

 300 

Total (*1 000)   

250  

250 

 200 

 150 

 100 

 200 

 

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Figure 15 |Construction Employment; KwaZulu-Natal Figure 16 |Construction Employment; Western Cape

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4. Composition of Construction Labour Force  

4.1 Composition by Gender  

 

According to Stats SA, the unemployment rate is higher amongst females (30,9%) compared to males (27.7%). The labour absorption rate is higher for males (47.8%) as compared to females (37.2%). At the end of 2019Q3, the construction industry employed around 1 339 000 people, of which 89% are male and 11% female20. In comparison with other industries, the construction industry has the highest proportion of male employment. The employment of women in the construction industry has increased by around 7% (from 140 000 to 150 000) from 2009Q3 to 2019Q3. On a year-on-year basis, the number of females employed in the industry decreased by -1 000, and there was a minor increase of 3 000 on a quarter-on-quarter basis in 2019Q3. Male representation in the construction industry is high (89%) compared with the industry average of 56% for all industries.

 Trends in the employment by gender are given in figure 17 below. These trends show that in times of downturns, females appear to be at the forefront of job losses, for instance after 2017Q1 job losses by females have been at a much higher rate than job losses by males. Females experienced the highest year-on-year job losses in 2018Q1 and 2018Q2, -25% and -10% respectively. Males experienced the highest year-on-year job losses in 2017Q3 and 2019Q3, -9% and -12% respectively. The breakdown in the composition in employment by gender has remained reasonably consistent over the past 8 years or so, namely around 89% male and 11% female.

 

 1,800

Male Female  250

 

1,600  

1,400

  

200  

1,200  

1,000

 

 150

 

800  

600  

400  

200

 100

 

 50

  

Figure 17 |Composition of Construction Employment by Gender  

Male domination is also prevalent in the consulting engineering sector, 68% of the employees are male while 32% are female.

        

20 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistic South Africa, www.statssa.gov.za

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Q3

 

 

4.3 Composition by Skills Profile  

 

An estimate breakdown of the labour force profile in the contracting sector is given below, obtained from the 2017 Workplace Skills Plan submissions and the CETA database21.

 

Table 6| Construction Labour Force profile Occupational Major Group % of TotalManagers 9%Professionals 8%Technicians and Associate Professionals 11%Clerical Support Workers 6%Service and Sales Workers 2%Trade Workers 14%Plant and Machine Operators and Assemblers 13%Elementary Occupations 37%

 

It is seen that the semi-, low and unskilled occupations of trade workers, plant and machine operators and assemblers, and elementary occupation, clerical support, and services support workers account for around 70% of the total construction workforce and only around 28% account for the skilled workers such as managers, professionals, technicians and associate professionals.

 

  

4.4 Skills Shortages; Contractors  

 

Access to skills is one of the constraints that contractors experience in growing their businesses. This is illustrated in figure 18 and 19 below where the constraints of access to work and access to skills are compared (weighted index) for General Building (GB) and Civil Engineering (CE) classes of work22

  

 100

 

90  

80  

70  

60  

50  

40  

30  

20  

10  

0

GB; Access to Skills GB; Access to Work

       

21 CETA (2017). Sector Skills Plan: 2017 to 2022. Construction Education and Training Authority, Pretoria. 22 cidb (2019). cidb SME Business Conditions Survey, Quarter 3 2019, Construction Industry Development Board,

www.cidb .org.za

17

 

 

Co

nst

rain

t to

Bu

sies

s G

row

th

(Wei

gh

ted

Ind

ex %

)

2008

Q3

2009

Q3

2010

Q3

2011

Q3

2012

Q3

2013

Q3

2014

Q3

2015

Q3

2016

Q3

2017

Q3

2018

Q3

2019

Q3

Figure 18|Constraints to Growth of Contractors; Access to Work and Skills (GB)

  

 100

 

90  

80  

70  

60  

50  

40  

30  

20  

10  

0

CE; Access to Skills CE; Access to Work

   

Figure 19 |Constraints to Growth of Contractors; Access to Work and Skills (CE)  

Note that the shortage of skills is also driving up the cost of labour, resulting in decreased profit margins for small and medium contractors. Small and medium sized emerging contractors are likely to be bearing the brunt of these skills shortages, and are the least able to attract and train skilled labour. According to Stats SA, unemployment rates are higher amongst individuals with less than matric and matric, relative to graduates and it is also reported that long term unemployment occurs more amongst those individuals without experience23. South Africa has an abundance of low and unskilled labour, there is a gap between the skills that the population has and the skills that the economy needs, this is also reflected by the high labour absorption rate for the individuals with tertiary education, they are more likely to be absorbed or employed in the economy. Compared to other sectors such as finance and business services, construction is one of the sectors which is most intensive in unskilled and low skilled labour, therefore it is one of the sectors that should be absorbing the high number of low and unskilled unemployed individuals. Unfortunately the low growth and decline in the sector has impacted the sector’s ability to create jobs.

 Access to skilled labour is a constraint for the growth of small and medium contractors, but it is currently not a significant constraint as it was in 2008 when the construction industry was at its peak. For both General Building (GB) and Civil Engineering (CE) access to skilled labour as a constraint was at its highest level in 2008Q3 (69) and (68) respectively. Contractors are currently experiencing that access to work is the most significant constraint to their growth.

            

23 StatsSA (2019). Quarterly Labour Force Survey; October 2019, Publication P0211. Statistic South Africa, www.statssa.gov.za

18

 

 

Notes

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20

 

 

 

 

 

 

 

 

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