The Western Cape’s finance and economic opportunities ministry has submitted a plea to save 100 000 jobs – as the country stares down the barrel at “a collapse of the construction sector in South Africa”.
This is part of an urgent appeal to open the construction industry by the Western Cape Minister of Finance and Economic Opportunities, David Maynier, and was part of a submission on Tuesday to Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma.
Maynier has warned that the construction sector could contract by a dramatic 41% in 2020, due to the lockdown.
“Now, more than ever, businesses need to be able to continue to trade safely and responsibly to ensure that we save jobs, livelihoods and the economy during the Covid-19 crisis. The private sector construction presents an opportunity for just that,” he said.
“Under normal circumstances, the sector already complies with very high health and safety standards and, as such, the implementation and regulation of additional measures to ensure safe operations to stop the spread of Covid-19 would not be very difficult for companies.”
Maynier also called for those manufacturing supplies to be permitted to increase their production to 50%, up from the current 30%.
On Tuesday, the MEC inspected a construction site to assess safety protocols, in line with strict Covid-19 regulations: the Brackengate 2 construction development in Brackenfell, Cape Town.
According to Maynier’s office, the industrial park was under construction prior to the Covid-19 crisis, but development was halted at the start of the nationwide lockdown, with only 58% of the building completed.
“Once complete, this industrial park will be home to two major companies providing essential services in the retail and pharmaceutical sectors. Each development has a commercial value of R436 million and R173 million, and would provide much-needed employment in the Western Cape,” the finance and opportunities ministry explained.
In his submission to Dlamini-Zuma, Maynier said that, under Level 4 restrictions, construction should be allowed to expand operations beyond the current public sector engineering and construction.
Maynier argues this should also now include “commercial, industrial and private residential construction, together with construction by public entities”.
“These proposals incorporate aspects of the draft Alert Level 3 and 2 provisions – all of which we believe can safely be implemented immediately (in the current Level 4),” Maynier explained.
His department estimated “the impact on the construction sector of the Covid-19 pandemic could cost the Western Cape 111 416 direct and indirect jobs in 2020, and a loss of R14.9 billion in income to people employed in this sector”.
“Opening up private construction as soon as possible, which we believe can safely be done under Alert Level 4, will help prevent these job losses,” Maynier argued.
“The construction sector is a vital component of the South African economy. In 2019, the sector was valued at R172 billion in South Africa and contributed approximately R32 billion to the Western Cape’s total gross value added.”
The construction sector, valued at R172 billion in 2019, had already been taking some strain pre-Covid-19 – down by 3.3% in 2020, as compared with 2019.
Since the lockdown, the predictions had deteriorated dramatically.
Besides an approximate 41% contraction predicted in 2020, it could be followed by a 10% contraction in 2021, translating to a loss of R12.9 billion in 2020 and R3 billion in 2021, Maynier said.
Currently, the construction sector was successfully operating safely for the purposes of public sector engineering and construction.
“We see no reason why this can’t be extended to the entire construction sector. In doing so, we can significantly impact on the ability for the economy to open in the Western Cape and South Africa, to save jobs and get more people working safely during the Covid-19 crisis,” Maynier added.