Smaller construction firms are playing an increasingly important role in generating income and creating employment.
Criminal activity, years of load shedding and weak economic growth have reshaped South Africa's construction industry, contributing to the decline of several of the country's largest contractors and creating space for smaller firms to play a much bigger role in the sector.
According to Statistics South Africa, the industry has faced numerous challenges over the years, including slow economic growth, low investment, load shedding, labour shortages, the Covid-19 pandemic and criminal activity.
One manifestation of that criminal activity has been the rise of so-called "construction mafia" groups. Law firm Cliffe Dekker Hofmeyr said these organised groups increasingly target construction projects through extortion, intimidation and site invasions, delaying developments, driving up costs and undermining investor confidence.
The difficult operating environment has coincided with the collapse or restructuring of some of South Africa's biggest construction companies, including Group Five and Basil Read, as well as major restructuring at Murray & Roberts, fundamentally changing the makeup of the industry.
