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January - June 2010 Biannual Economic and Capacity Survey

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January - June 2010. Biannual Economic and Capacity Survey . Salient Features. Fewer responses combined with a much lower represen tation from smaller firms (4% compared to 38% in preceding survey (Dec-09)) - PowerPoint PPT Presentation

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Page 1: January  - June 2010

January - June 2010

Biannual Economic and Capacity Survey

Page 2: January  - June 2010

Salient Features

Fewer responses combined with a much lower representation from smaller firms (4% compared to 38% in preceding survey (Dec-09)) Marginal increase in fee income, up 3% since the last six months of 2009, but still down 5% compared to same period in 2009. Fee income in real terms down 8,1% y/y (constant prices) No real change in employment estimated at 19 632 as at June 2010 Salaries represented 54% of total turnover, estimated at R8,3 bn (current prices) Confidence levels were better than expected in the first six months, and marginally higher at 87,1 compared to the preceding quarter. Confidence

however deteriorates in the second half to 71.9, with a much improved outlook for 2010, recovering to 93.6. Although the bulk of earnings are in the civil sector, earnings dropped 19% y/y constant prices, but increased by 12% y/y in structural services.

There was an impressive 98% increase in earnings in the environmental sector in the last 6 months to an estimated R749m constant prices. Earnings in Gauteng improved in the last 6 months (up 15,8%) but is still 31% lower compared to the same period in 2009 Earnings in the Western Cape deteriorated in the last 6 months, but was up an impressive 59% y/y There was a notable increase in earnings across South African borders in the last 12 months. Earnings within the central government were up 135% y/y, to over R1,4bn in June 2010, with a 19% increase in provincial government earnings.

Earnings within the private sector were 32% lower compared to last year. Earnings in transportation increased by 24%, and a 35% increase was reported in earnings in the commercial sector. Housing edged up by 7%. Earnings on water services fell by a disappointing 30% compared to last year. Competition in tendering intensified, with 73% of respondents reporting fierce competition (compared to 44,7% in the preceding survey) Profits only deteriorated slightly, in spite of higher levels of competition, and averaged 15,4% during the first 6 months. Discounting however increased from an average of 16,4% to 18,9% Fewer firms are expecting to increase staff Capacity utilization has fallen to 87.5 (from 89.5 in the December 2009 survey) The value of bursaries increased to 0.86% of the salary bill The issue of payment has become a greater problem in this survey, up to 23,4%, from 18,5% in the preceding survey, mainly due to poor payment

from parastatals, and the private sector. A weakening was also reported in payment received from central government. There was no change in local government, but it remained unacceptably high at 16% of payment outstanding for longer than 90 days.

CESA Biannual Economic and Capacity Survey June 2010

Page 3: January  - June 2010

Civil Industry Outlook: 2nd Quarter 2010

CESA Biannual Economic and Capacity Survey June 2010

According to the SA Reserve Bank, the general economy contracted by 1,8% during 2009, the ‘overhang’ of whichis still felt in a rising unemployment rate. The good news is that most indicators show strong recovery and grossdomestic product grew (annualised) at 4,6% during the 1st quarter of 2010. Consumption expenditure (bothconsumer and government) increased strongly, and the decline in inventory holdings by companies slowed down.The general economic outlook is still subdued for 2010 (2.5%) and somewhat better during 2011/12 (3.5% to 4%).Whereas the general economy is coming out of its sharp recession quite strongly and despite the much talkedabout R845 billion to be spent over 3 years, capital expenditure is slowing down. Gross fixed capital formation bydifferent clients showed mixed trends; all tiers of government recorded lower capital expenditure (-1,2% for 2009 & -8% for 1st Q 2010), and so did private sector investment spending (-7% for 2009 & -0,7% for 1st Q 2010). Publiccorporations’ fixed investment grew by 41% during 2009, but only 7% recently (1st Q 2010).

The Confidence Index recovered to roughly the same level it was at the beginning of 2009. Over the last 12 monthsit declined 41%, the last 6 months by 24% and improved 20% over the last quarter! This is a VERY good sign andindicates an expected turn of fortune a year and a half away. The cumulative number of tenders invitations declinedby 16% over a year, by 20% over 6 months but actually improved quarter on quarter (ending 1st quarter 2010). Theaverage value kept on declining though. This still indicates tough times in the short term. The latter is reflected inthe value of contracts awarded dropping by 55% over 12 months, 62% over 6 months and again over the lastquarter (ending 1st quarter 2010). It seems as if the bottom of this indicator is still some time away. The result is thatestimated civil engineering turnover declined by 23,5% in real terms compared to a year ago, and 33% over a 6months period (ending 1st quarter 2010). It is expected to decline by 39% (real) in calendar 2010 compared to 2009.Re-estimated annual employment started to show stronger signs of contraction; a decline of 7% on a year ago, and-13% over a 6 months period. The fear expressed in our last report that companies cannot hold on to theirunoccupied staff is becoming a reality.

The general economy is recovering well after the sharp recession but despite the much talked about R845 billion tobe spent over 3 years, capital expenditure is slowing down with delivery bottlenecks to execute micro economicpolicies at the heart of the problem. The lack of a coherent policy framework (between macro and micro policies),political fractions within the ruling elite and a growing, yet increasingly underperforming ‘developmental state’ allcontribute to this.

Source: SAFCEC

Page 4: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Firm distribution based on Annual Turnoverbased on responses received: January – June 2010

Category by gross annual income

% of firms

0 – R1,5m 4%R1,5m – R11,5m 34%> R11,5m 62%

Total 100.0%

0-1.54.0%

1.5-11.534.0%

>11.562.0%

Firm distribution based on turnover

0-1.538.0%

1.5-11.543.0%

>11.519.0%

Firm distribution based on turnover: Dec-09

Page 5: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Economic Impact

Page 6: January  - June 2010

Relationship to Gross Fixed Capital Formation

Page 7: January  - June 2010

Consulting Engineering IndustryFee income, Rm Constant 2000 prices (CPI Deflated) Annualised

Jun-96 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-100

2,000

4,000

6,000

8,000

10,000

12,000

Page 8: January  - June 2010

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Survey period

PER

CEN

TAG

E

% 13% 12% 8% -20% -18% -11% -8% 6% 14% 5% 5% 5% -8% -8% 2% 8% 8% 17% 51% 38% 14% 20% 40% 43% 2.10% -16.90 -8.10

Jun-

97

Dec-

97

Jun-

98

Dec-

98

Jun-

99

Dec-

99

Jun-

00

Dec-

00

Jun-

01

Dec-

01

Jun-

02

Dec-

02

Jun-

03

Dec-

03

Jun-

04

Dec-

04

Jun-

05

Dec-

05

Jun-

06

Dec-

06

Jun-

07

Dec-

07

Jun-

08

Dec-

08

Jun-

09

Dec-

09

Jun-

10

Consulting Engineering IndustryReal Fee income (CPI deflated), 2000 prices: Annual Change

Page 9: January  - June 2010

-60%

-40%

-20%

0%

20%

40%

60%

Jun-

95

Jun-

97

Jun-

98

Jun-

99

Jun-

00

Jun-

01

Jun-

02

Jun-

03

Jun-

04

Jun-

05

Jun-

06

Jun-

07

Jun-

08

Jun-

09

Jun-

10

Jun-

11

% C

hang

e fr

om p

revi

ous

surv

ey

-10

10

30

50

70

90

110

% R

espo

nden

ts s

atis

fied

% Chg Index

CESA Confidence Index

Page 10: January  - June 2010

Industry Confidence

Page 11: January  - June 2010

20

30

40

50

60

70

80

90

100

110

Jun-

96

Jun-

97

Jan-

98

Jun-

98

Jan-

99

Jun-

99

Jan-

00

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

CO

NFI

DE

NC

E IN

DE

X

0

2 000

4 000

6 000

8 000

10 000

12 000

Fee

inco

me

(con

stan

t pric

es)

Confidence Fee income Constant prices

Consulting Engineering IndustryReal Fee income (CPI deflated) vs confidence

Page 12: January  - June 2010

20

30

40

50

60

70

80

90

100

110

Jun-

96

Jun-

97

Jan-

98

Jun-

98

Jan-

99

Jun-

99

Jan-

00

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

CO

NFI

DE

NC

E IN

DE

X

200030004000500060007000800090001000011000120001300014000150001600017000180001900020000

Fee

inco

me,

R m

ill, c

urre

nt p

rices

Confidence Fee income Current prices

Consulting Engineering IndustryNominal Fee income vs confidence

Page 13: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

-5%

0%

5%

10%

15%

20%

25%

30%

Jun-

98

Jan-

99

Jun-

99

Jan-

00

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

CESA Labour Cost Indicator: Y-Y Change

Page 14: January  - June 2010

8 500

9 500

10 500

11 500

12 500

13 500

14 500

15 500

16 500

17 500

18 500

19 500

20 500D

ec-9

7

Jun-

98

Dec

-98

Jun-

99

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Em

ploy

men

t

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

Fee

inco

me

(con

stan

t pric

es)

Employment Revised Income: CPI 2000 prices Income : CESA LCI 2005 prices

Consulting Engineering IndustryEmployment vs REAL fee income (CPI / LCI Deflated)

Page 15: January  - June 2010

9 500

10 500

11 500

12 500

13 500

14 500

15 500

16 500

17 500

18 500

19 500

20 500

Dec

-97

Jun-

98

Dec

-98

Jun-

99

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Em

ploy

men

t

03006009001 2001 5001 8002 1002 4002 7003 0003 3003 6003 9004 2004 5004 8005 1005 400

Sala

ry/W

ages

(R m

ill, 2

000

pric

es)

Employment Salary/Wage bill (Constant)

Consulting Engineering IndustryEmployment vs Salary / Wage bill

Page 16: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Discounting

0.0%2.0%

4.0%6.0%

8.0%10.0%

12.0%14.0%

16.0%18.0%

20.0%

%

% 15.10% 16.62% 15.30% 15.30% 18.20% 16.40% 18.90%JUN07 DEC07 JUN08 DEC08 JUN09 DEC09 JUN10

Question: What is the prevailing discount being offered in a tendering situation to clients by your firm, benchmarked against the ECSA Guideline Fee Scales?

43% of firmsdiscounted by 20% or more

Page 17: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Fee income earned by Sub-disciplines: % ShareJune 2010

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Agricultural

Architecture

Mechanical building Services

Civil

Electrical / Electronic

Environmental

Facilities

Geotechnical

Industrial Process / Chemical

GIS

Hydraulics

Information Systems / Technology

Marine

Mechanical

Mining

Project Management

Quantity Surveying

Structural

Tow n planning

Question: What type of work did your company engage in during the past 6 months?

Page 18: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Fee income earned by Sub-disciplines: % ShareJune 2009 – June 2010

0% 10% 20% 30% 40% 50% 60%

Civil

Mining

Project Management

Structural

Jun-09 Dec-09 Jun-10

Question: What type of work did your company engage in during the past 6 months? 80% of fees are earned in four

disciplines namely civil, project management,

structural and mining

Page 19: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Fee income earned by Sub-disciplines: % ShareChange in the last 12 months

-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

AgriculturalArchitecture

Mechanical building ServicesCivil

Electrical / ElectronicEnvironmental

FacilitiesGeotechnical

Industrial Process / ChemicalGIS

HydraulicsInformation Systems / Technology

MarineMechanical

MiningProject ManagementQuantity Surveying

StructuralTow n planning

Question: What type of work did your company engage in during the past 6 months?

Page 20: January  - June 2010

0

200

400

600

800

1000

1200

1400

1600

2002 2003 2004 2005 2006 2007 2008 2009 Jun-10

Oth

er, R

mill

200

0 pr

ices

0

1000

2000

3000

4000

5000

6000

Civi

l, R

mill

200

0 pr

ices

Structural Proj Mang Mining Civil

Fee income earned by Top four disciplines: R mill 2000 pricesAnnual average: 2002 – June 2010 (annualised)

Civil

Page 21: January  - June 2010

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

Wat

er

Tran

spor

tatio

n

Ene

rgy

Min

ing/

Qua

rryin

g

Edu

catio

n

Hea

lth

Tour

ism

Hou

sing

Com

mer

cial

Agr

icul

ture

Oth

er

Perc

enta

ge s

hare

Dec-08 Jun-09 Dec-09 Jun-10

Fee income earned by economic sectorPercentage market share December 2008 – June 2010

Section A General Questions: Question: Income distribution per economic sector

Page 22: January  - June 2010

Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-100

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Water (Full water cycle) Transportation (land, air, road, rail, ports)Energy (electricity, gas, hydro) Mining / QuarryingTourism / Leisure Housing (residential inc. land)Commercial

Fee income earned by key economic sectorsJune 2006 – June 2010

Section A General Questions: Question: Income distribution per economic sector

Page 23: January  - June 2010

Fee income earned by key economic sectorsJune 2005 – June 2010

Jun-05Dec-

05Jun

-06Dec-

06Jun

-07Dec-

07Jun

-08Dec-

08Jun

-09Dec-

09Jun

-100

200400600800

1,0001,200

Housing

Jun-05Dec-

05Jun

-06Dec-

06Jun

-07Dec-

07Jun

-08Dec-

08Jun

-09Dec-

09Jun

-100

200400600800

1,0001,2001,4001,6001,8002,000

Water

Jun-05Dec-

05Jun

-06Dec-

06Jun

-07Dec-

07Jun

-08Dec-

08Jun

-09Dec-

09Jun

-100

5001,0001,5002,0002,5003,0003,5004,0004,500

Transportation

Jun-05Dec-

05Jun

-06Dec-

06Jun

-07Dec-

07Jun

-08Dec-

08Jun

-09Dec-

09Jun

-100

100200300400500600700

Energy

Jun-05Dec-

05Jun

-06Dec-

06Jun

-07Dec-

07Jun

-08Dec-

08Jun

-09Dec-

09Jun

-100

5001,0001,5002,0002,5003,000

Commercial

Jun-05Dec-

05Jun

-06Dec-

06Jun

-07Dec-

07Jun

-08Dec-

08Jun

-09Dec-

09Jun

-100

50100150200250300

Health

Page 24: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

E-C

ape

W-C

ape

N-C

ape

F St

ate

N-W Lim

Gau

t

Mpu

Kw

az

Afr

ica

Int'l

0

5

10

15

20

25

30

35

40

-15

-10

-5

0

5

10

% Share Change last 12 months

% S

hare

(bar

)

Provincial Market Share: June 2010Vs change in market share from June 2009

GAI

N

mar

ket

shar

e

Section A: General Questions: Question 10Income distribution per province

Page 25: January  - June 2010

0

500

1000

1500

2000

2500

3000

3500

4000

4500

R m

ill, C

onst

ant 2

000

pric

es

E-CAPE W-CAPE GAUT KWA-NAT

E-CAPE 289 288 353 344 388 450 400 395 465 588 655 667 750 694 654 828 866

W-CAPE 538 527 518 560 478 438 572 681 1058 1164 1077 1253 1285 1 303 1 127 1191 1461

GAUT 1 380 1 343 1 120 947 1 122 1 253 1 239 1 452 1769 1954 2113 2408 2813 3 582 4 212 3485 2802

KWA-NAT 393 387 379 473 436 420 535 591 688 756 839 871 1066 1 300 1 620 1728 1280

Jun'02 Dec'02 Jun'03 Dec'03 Jun'04 Dec'04 Jun'05 'Dec'05 'Jun'06 'Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10

Fee income earned by province(High Capacity economies) – Annualised smoothed

Gauteng

Section A: General Questions: Question 10Income distribution per province

Page 26: January  - June 2010

0

50

100

150

200

250

300

Dec-98 Dec-99 Dec'00 Dec'01 Dec'02 Dec'03 Dec'04 'Dec'05 'Dec'06 Dec'07 Dec'08 Dec'09

Inde

x De

c'98

=100

High capacity Low capacity

Fee income earned (Constant 2000 prices)High Capacity vs lower capacity provincial economies (Smoothed)

Section A: General Questions: Question 10Income distribution per province

Page 27: January  - June 2010

68.00%

70.00%

72.00%

74.00%

76.00%

78.00%

80.00%

82.00%

84.00%

86.00%

88.00%

Perc

enta

ge

% 76.04% 75.53% 80.12% 80.68% 80.70% 80.63% 80.07% 79.14% 78.25% 79.42% 81.27% 82.57% 82.07% 81.64% 80% 80.23% 83.25% 86.05% 86.95% 84.80%

Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Jun'03 Dec'03 Jun'04 Dec'04 Jun'05 'Dec'05 'Jun'06 'Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10

Fee income earned (Constant 2000 prices)% of RSA Earnings : High Capacity provincial economies

(Smoothed)

Section A: General Questions: Question 10Income distribution per province

Page 28: January  - June 2010

Fee income earned : RSA vs EX-RSAR mill, 2000 prices (Annualised, smoothed)

Section A: General Questions: Question 10Income distribution per province

Dec-98

Jul-99Fe

b-00Se

p-00Apr-

01Nov

-01Jun

-02Jan

-03Aug

-03Mar-

04Oct-

04

May-05Dec-

05Jul

-06Fe

b-07Se

p-07Apr-

08Nov

-08Jun

-09Jan

-100

200400600800

1,0001,2001,4001,6001,800

01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000

Ex-RSA - left axis RSA - right axis

Page 29: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

10

20

30

40

50

60

% S

hare

Jun-08Dec-08Jun-09Dec-09Jun-10

Jun-08 9.7 15.8 21 12.8 40.7

Dec-08 7 17.7 27.9 10.4 37

Jun-09 6.4 10.7 23 9.8 50.2

Dec-09 15.7 9.9 27.4 12.8 34.2

Jun-10 16.4 13.9 20.4 12.7 36.6

Central Provincial Local Parastatals Private

Fee income earned by type of client% Share

Section A: General Questions: Question 11Local (SA) Income distribution per fee paying client type, during the past 6 months

Page 30: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

JUN

01

DEC

01

JUN

02

DEC

02

JUN

03

DEC

03

JUN

04

DEC

04

JUN

05

DEC

05

JUN

06

DEC

06

JUN

07

DEC

07

JUN

08

DEC

08

JUN

09

DEC

09

JUN

10

R m

ill, C

onst

ant 2

000

pric

es

CentralProvincialLocalParastatalsPrivate

Fee income earned by type of clientR mill 2000 prices

(Annualised, smoothed - avg over 2 survey periods)

Section A: General Questions: Question 11Local (SA) Income distribution per fee paying client type, during the past 6 months

Page 31: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2009

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

Rm

, 200

0 pr

ices

PublicPrivate

Public 1 962 2 013 2 108 2 353 2 219 1 996 2 180 2 389 2 417 2 705 3 200 3 470 4 187 3979 5633 6556 4840 5694 5650

Private 1 595 1 627 1 634 1 471 1 440 1 513 1 366 1 290 1 407 1 437 1 941 2 498 2 587 3204 3866 3851 4870 2959 3263

JUN01 DEC01 JUN02 DEC02 JUN03 DEC03 JUN04 DEC04 JUN05 DEC05 JUN06 DEC06 JUN07 DEC07 JUN08 DEC08 JUN09 DEC09 JUN10

Fee income earned by type of clientConstant 2000 prices

(Annualised, smoothed - avg over 2 survey periods)

Section A: General Questions: Question 11Local (SA) Income distribution per fee paying client type, during the past 6 months

Page 32: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Competition in tendering

0%

20%

40%

60%

80%

100%

% R

espo

nden

ts

Jun-07 0.00% 2.42% 22.11% 56.29% 19.18%

Dec-07 0.00% 3.01% 17.55% 55.57% 23.86%

Jun-08 0.00% 1.40% 20.80% 48.70% 29.10%

Dec-08 0.00% 0.00% 21.42% 42.28% 36.29%

Jun-09 0.22% 0.51% 62.73% 28.36% 8.18%

Dec-09 0.00% 0.10% 21.80% 33.50% 44.70%

Jun-10 0.00% 8.67% 3.28% 14.79% 73.26%

Very Low Low Keen Very Keen Fierce

Section B: Business Cycle Indicators - Question 16During Jan – June 2010 competition for work was (Tick selection)

Page 33: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Competition in tendering

80%

82%

84%

86%

88%

90%

92%

94%

96%

98%

100%

% R

espo

nden

ts, c

ompe

titio

n k

een

to fi

erce

% 99.9% 99.9% 97.5% 98.9% 98.0% 99.3% 99.0% 98.2% 99.1% 97.8% 98.7% 97.1% 99.5% 99.1% 97.6% 96.9% 98.6% 100% 99.30 99.90 91.30

Jun-00

Dec-00

Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Section B: Business Cycle Indicators - Question 16During Jan – June 2010 competition for work was (Tick selection)

Page 34: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

10

20

30

40

50

60

70

80

90

100

Eng O Tech Technologist Technicians Support staff

Jun'06 Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10

% of Firms wanting to increase staff

New June 2005 survey

Page 35: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Engineering Skills Shortfall

-100

102030405060708090

100

Dec

-97

Jun-

98

Dec

-98

Jun-

99

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

% o

f res

pond

ents

% Wanting to increase engineers Difficulties

Fewer firms want to increase engineers

% Experiencing difficulties

Page 36: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

10

20

30

40

50

60

70

80

90

100En

g

O T

ech

Tech

nolo

gist

Tech

nici

ans

Oth

er

PDI E

ng

PDI T

ech

PDI T

echn

o

% R

espo

nden

ts

Jun'08 Dec'08 Jun'09 Dec'09 Jun'10

Recruitment problems

Page 37: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Bursaries% of Salary / Wage bill

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

Dec-

96

Dec-

97

Jun-

98

Dec-

98

Jun-

99

Dec-

99

Jun-

00

Dec-

00

Jun-

01

Dec-

01

Jun-

02

Dec-

02

Jun-

03

Dec-

03

Jun-

04

Dec-

04

Jun-

05

Dec-

05

Jun-

06

Dec-

06

Jun-

07

Dec-

07

Jun-

08

Dec-

08

Jun-

09

Dec-

09

Jun-

10

Page 38: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

10

20

30

40

50

60

70

80

90

Dec

-96

Jun-

98

Jun-

99

Jun-

00

Jun-

01

Jun-

02

Jun-

03

Jun-

04

Jun-

05

Jun-

06

Jun-

07

Jun-

08

Jun-

09

Jun-

10

R m

ill, 2

000

pric

esBursaries

R mill 2000 prices (Annualised)

Page 39: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

June

200

5

Dec

embe

r20

06

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Training (Salaries and Direct Training Costs) % of Payroll

Dat

a no

t ava

ilabl

e

Large % of respondents did not complete information on salaries in December 2009 survey

Dat

a no

t ava

ilabl

e

Page 40: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

500

1000

1500

2000

2500

3000

june

200

5

Dec

embe

r20

05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Training (Salaries and Direct Training Costs) Rand millions, Constant 2000 prices

Dat

a no

t ava

ilabl

e

Large % of respondents did not complete information on salaries in December 2008 and 2009 survey

Dat

a no

t ava

ilabl

e

Page 41: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%D

ec-9

7

Jun-

98

Dec

-98

Jun-

99

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

%Training (Direct costs only)

% of Payroll

Page 42: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

10

20

30

40

50

60

70

80

90

100De

c-97

Jun-

98

Dec-

98

Jun-

99

Dec-

99

Jun-

00

Dec-

00

Jun-

01

Dec-

01

Jun-

02

Dec-

02

Jun-

03

Dec-

03

Jun-

04

Dec-

04

Jun-

05

Dec-

05

Jun-

06

Dec-

06

Jun-

07

Dec-

07

Jun-

08

Dec-

08

Jun-

09

Dec-

09

Jun-

10

R m

ill 2

000

pric

esTraining (Direct costs)Rand millions, Constant 2000 prices

Page 43: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0

50000

100000

150000

200000

25000020

01

2002

2003

2004

2005

2006

2007

Student enrolments in public higher education institutionsScience, Engineering & Technology

Increased by 39% between 2005 and 2007

214 341

Source: Department of Education

Page 44: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Jun-

98

Jan-

99

Jun-

99

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Utili

satio

n

-40

-20

0

20

40

60

80

Net %

cha

nge

expe

ctin

g in

crea

se

Net % Change Utilisation

Industry Capacity UtilisationOf existing technical staff

Page 45: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Total fee income outstanding, by client Exceeding 90 days

0

10

20

30

40

50

60

70

Cen

tral

Prov

inci

al

Loca

l

Para

stat

als

Priv

ate

% o

f Tot

al fe

e in

com

e ea

rned

Jun-08 Dec-08 Jun-09 Dec-09 Jun-10

Page 46: January  - June 2010

Fee income outstanding for longer than 90 daysJune 2010

Page 47: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Total fee income outstanding for longer than 90 days% of total fee income earned

0

5

10

15

20

25De

c-99

Jun-

00

Dec-

00

Jun-

01

Dec-

01

Jun-

02

Dec-

02

Jun-

03

Dec-

03

Jun-

04

Dec-

04

Jun-

05

Dec-

05

Jun-

06

Dec-

06

Jun-

07

Dec-

07

Jun-

08

Dec-

08

Jun-

09

Dec-

09

Jun-

10

% o

f Tot

al fe

e in

com

e ea

rned

Surv

ey a

men

ded

to in

clud

e fo

reig

n cl

ient

s

Page 48: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Escalation trendsYear-on-Year % Change

0

2

4

6

8

10

12

14

Annu

al C

hang

e, %

% 8.7 6.9 5.8 5.3 5.7 9.2 5.9 1.4 3.4 4.6 6.6 11.6 7.13 5.6 5.1 5.7 5.6 6

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Based on headline consumer inflation (CPI)Forecasts Industry Insight Economist Poll

Source: ABSA

CPI Basket Revised in January 2009

Page 49: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Consulting Engineering ProfessionLabour unit cost indicator: Year-on-Year % Change (Smoothed)

-5%

0%

5%

10%

15%

20%

25%

30%

LUC 15.2% 11.4% 22.5% 21.8% 9.2% -1.9% 3.7% 15.0% 8.0% 2.88% 4.30% 14.30% 22% 11.30% 5.30% 7.20% 9.50% 10.60% 9.10% 10.20%17.80%25.50%20.60%10.70%4.30%

J un-98

Dec-98

J un-99

Dec-99

J un-00

Dec-00

J un-01

Dec-01

J un-02

Dec-02

J un-03

Dec-03

J un-04

Dec-04

J un-05

Dec-05

J un-06

Dec-06

J un-07

Dec-07

J un-08

Dec-08

J un-09

Dec-09

J un-10

Page 50: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Consulting Engineering ProfessionLabour unit cost indicator: Annual Average Y-Y Chg

0%

5%

10%

15%

20%

25%

LUC 22.2% 3.7% 9.4% 5.4% 9.3% 16.3% 6.30% 10% 9.65% 21.67% 15.64% 4.30%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jun-10

Page 51: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Typical Employment BreakdownJanuary – June 2010

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Professional Engineer Pr.Eng

Professional Architects

Professional Quantity Surveyors

Professional Other

Technologists Pr TEchENg

Technicians PrTechni

Unregistered technical staff: Engineer

Unregistered technical staff: Technologist

Unregistered technical staff: Technician

Unregistered technical staff: Other

Technical Assistants

Draughtspersons

Laboratory / Survey Assistants

Administration / Support staff

Total

Black Coloured Asian White

Page 52: January  - June 2010

Typical Employment profile: January – June 2010

Total employment 19 632

Page 53: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

'Dec-03

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Black Coloured Asian White

Overall Employment Breakdown, by raceDecember 2003 – June 2010

Page 54: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

10%

15%

20%

25%

30%

35%

Dec

-99

Jun-

00

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

%Employment profile: Black only (excluding Asian / Colourds)

representation of total employment % Share of total employment

Page 55: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

Professional Indemnity InsuranceRisk profile

0%

10%

20%

30%

40%

50%

60%

70%

80%

%

Dec-07 65.2% 30.3% 4.6%Jun-08 58.7% 39.7% 1.6%Dec-08 65.8% 34.2% 0.0%Jun-09 71.4% 28.6% 0.0%Dec-09 75.0% 17.5% 7.5%Jun-10 68.80% 28.10% 3.10%

Low Medium High

In terms of firm’s perceptions of risk, close over 70% of respondents said that their firm had a low risk exposure, compared to almost 30% saying it was regarded as medium.

Page 56: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0%10%20%30%40%50%60%70%80%90%

100%JU

N06

DEC

06

JUN

07

DEC

07

JUN

08

DEC

08

JUN

09

DEC

09

JUN

10

%

Pty Ltd CC Partnership

Equity Distribution by firm type

Page 57: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

JUN

06

DEC

06

JUN

07

DEC

07

JUN

08

DEC

08

JUN

09

DEC

09

JUN

10

Ownership / Equity: % Share of total employmentPTY, CC & Partnerships

Page 58: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

JUN

06

DEC

06

JUN

07

DEC

07

JUN

08

DEC

08

JUN

09

DEC

09

JUN

10

Bla

ck e

quity

as

% o

f tot

al E

quity

Black equity as % of total equity

Black Ownership / Equity: % Share of total ownership / equityPTY, CC & Partnerships

Black, including Asian & Coloured

- Women represented 4,7% of total ownership / equity compared to 6% in the June 2009 survey- Black women represented 3,5% of total ownership / equity compared to 3,4% in the December June

2009 survey

Page 59: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Pty_exec

Pty_nonexec

Member of CC

Partner

%

Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10

Jun-10 25.50% 28.60% 47.60% 0%Dec-09 19.6% 88.9% 51.8% 0.0%Jun-09 14.2% 70.0% 20.0% 0.0%Dec-08 13.5% 81.5% 36.8% 0.0%Jun-08 18.5% 72.0% 41.2% 0.0%Dec-07 16.9% 55.0% 24.1% 0.0%Jun-07 21.9% 58.5% 32.5% 7.7%

Pty_exec Pty_nonexec Member of CC Partner

Black ownership / equity as % of total ownership / equity by type of company

June 2007 – June 2010

Black includes Asian and Coloureds

Page 60: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

%

Jun-08 100.0% 72.7% 94.4% 75.0% 84.0%Dec-08 100.0% 93.0% 100.0% 75.0% 84.0%Jun-09 100.0% 93.3% 100.0% 75.0% 93.0%Dec-09 100.0% 100.0% 100.0% 100.0% 100.0%Jun-10 100.0% 91.0% 100.0% 100.0% 97.0%

Large Medium Small Micro Total

Quality Management System

Page 61: January  - June 2010

CESA Biannual Economic and Capacity Survey January – June 2010

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

%

Jun-08 81.8% 36.0% 11.0% 0.0% 30.1%Dec-08 87.5% 46.7% 20.0% 0.0% 42.0%Jun-09 90.0% 20.0% 20.0% 12.5% 34.8%Dec-09 90.9% 42.1% 14.3% 16.7% 45.2%Jun-10 100.0% 27.0% 17.0% 20.0% 50.0%

Large Medium Small Micro Total

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Page 62: January  - June 2010

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