Confidence in the engineering sector improved in the second half of last year as conditions continued to surprise firms, a survey released by Consulting Engineers SA (Cesa) on Friday shows.
The bi-annual economic and capacity survey showed that the confidence index for July to December 2013 was revised from an expected level of 85 to 98.1.
The more upbeat sentiment was maintained for the next 12 months, averaging 98.3 for the first half of this year and 98.5 for the last half. Cesa said the revised confidence level was at its highest since 2008/09.
Investment by private businesses showed a modest improvement but was offset by lower growth in public corporations and general government.
Cesa expected investment growth to continue to surpass gross domestic product growth, with projected increases of between 4 percent and 5 percent over the next two years.
Although expectations were that fee earnings would show flat growth or no change, there was a nominal increase of 9 percent in the last six months of last year. Of concern was that 23 percent of fee earnings were outstanding for longer than 90 days, translating to an estimated R5 billion.
Employment in the sector was up by 26 percent, or 5 122 staff, compared with the same period in 2012.
The appointment of black executive staff increased to 35.8 percent from 35.5 percent, 30.1 percent, and 28.1 percent in the previous three surveys.
Cesa raised a few concerns about problems in the industry.
Members were bothered by unrealistic tendering fees and the time it took to finalise a proposal, which affected profitability. Fraud and corruption were also a reality. Cesa had created a R1 million anti-corruption fund to proactively prevent tendering irregularities experienced by its members.
The standard and performance of the industry continued to be threatened by the involvement of non-Cesa members, the organisation claimed.
“Firms from across South African borders are tendering at rates that are not competitive for local firms. Complaints have been received of some of these firms not producing proper drawings and not attending site visits.”
Clients should remain vigilant as contracts were awarded to “unscrupulous firms” in mostly smaller rural areas. Firms had noticed a decrease in the quality of technical personnel, which threatened the built environment.
Cesa said service delivery at municipal level remained a “critical burning issue” and was threatened by incapacitated local and provincial governments. “The public sector, and these two tiers of government in particular, as major clients to the consulting engineering industry, are called upon to become more effective, more proactive in identifying needs and priorities, and more efficient in project implementation and management.”