MBA North, the construction sector industry association for Gauteng, North West, Mpumalanga and Limpopo, partnered with the Construction Education and Training Authority (CETA) and the National Home Builders Registration Council (NHBRC) to present a workshop session aimed at helping Mpumalanga building contractors to find and optimise opportunities in the region.
“2019 is proving to be yet another challenging year for the industry, with even large contractors battling with cash flow, shrinking margins and labour issues. For smaller contractors, securing sub-contracting engagements and accurately costing jobs in an increasingly competitive market, are also challenges. To help contractors, the annual Mpumalanga Contractor Opportunities Breakfast is held to help contractors overcome current challenges in the market, and successfully seize opportunities that exist,” says MBA North Marketing & Business Development Manager, Boitumelo Thipe.
The event outlined industry trends, what key contractor opportunities currently exist in the region, and give advice on finding work, best practice in applying for tenders and how to price bill of quantities.
A major trend developing in the construction sector is the emergence of scores of informal and SMME construction companies across the country, says Robert Semenya, CEO at CETA. “While we have been very active in terms of skills development across the construction sector, we have concluded that we have focused primarily on technical skills in the past, and one area we need to focus more on is enterprise development,” he says. “At our recent CETA SMME Summit, we announced plans to focus more on supporting SMME development through practical business skills development to take the informal sector beyond ‘hand to mouth’ operations.”
With around 1.4 million people in formal employment in the construction sector, Semenya estimates that there could be hundreds of thousands working informally in the sector. CETA is currently conducting research into the scale and needs of these informal construction companies, and is set to launch a new SMME strategy around June this year. CETA plans to offer business training tailored to their unique circumstances, helping them to grow into more formal, sustainable companies that in turn become employers. At the Mpumalanga Contractor Opportunities Breakfast, he outlined CETA’s plans and highlighted opportunities on offer via CETA.
Effective and accurate pricing is a significant challenge facing many smaller construction firms – particularly at a time when margins are tight, says Kabelo Sentsomedi, Senior Technical Consultant at Construction Computer Software (CCS). “While emerging contractors may be very skilled at the technical aspects of the work, they often lack the experience to price quotes competitively and accurately,” he says. In a constrained market, some contractors will quote at break-even point, just to stay in business and with low or no margins at play, pricing too low or overlooking allowables could be disastrous.
At the Mpumalanga Contractor Opportunities Breakfast, Sentsomedi outlined best practice in project pricing and management and demonstrated CCS’s Candy estimating, planning and project control, which enables contractors to accurately estimate and cost projects, from quantity take-off, first estimate right through to final account.
“Knowing where to find opportunities and how to get the work – with a reasonable margin – are key to survival in these tough times,” says Thipe. “MBA North and partners therefore present an ongoing series of breakfast workshops for contractors, to help them stay in business and hopefully even thrive, despite the challenging market.”
Hastings Moeng, Marketing Officer at NHBRC Mpumalanga, says: “The NHBRC is a regulatory body of the Department of Human Settlements mandated to protect the interests of the housing consumer whilst regulating the home building industry. In light of this, we were delighted about this opportunity and platform to engage both emerging and established builders. We unpacked the mandate of the NHBRC comprehensively whilst offering more information on our processes. Our goal is to continue to assist and protect housing consumers by educating and empowering the home builders with the correct information and practical solutions, thus minimising any prevalence of contractors who deliver housing units of substandard design, workmanship and poor quality materials.”