South Africa’s vital construction and built environment sectors are reeling from a perfect storm of material shortages, eye-watering price hikes, and protracted lead times for crucial components like steel, aluminium, solar panels, and electrical goods. The culprit? A surprising ripple effect from sweeping US tariffs that are now being acutely felt at the southern tip of Africa.
“Although these are taxes on imports into the US, they have a ripple effect on local building costs as Chinese and other suppliers redirect their materials to markets without tariffs and disrupt our supply chains,” warned Nolubabalo Tsolo, the executive director of the Association of South African Quantity Surveyors (ASAQS).
The consequence is a precarious balancing act for contractors, who are now struggling to manage escalating expenses and load prohibitive risk premiums onto their tenders. This precarious situation threatens to derail crucial public and private sector projects, from vital roads and bridges to much-needed schools and affordable housing, as their budgets are pushed to breaking point. Adding to the woes, erratic currency fluctuations are making dollar-priced imports even more exorbitant, tightening the screws on affordability and jeopardising delivery timelines.
Amidst this maelstrom of uncertainty, quantity surveyors (QS) – often dubbed “building accountants” (Bou-rekenaare) in Afrikaans – are emerging as the unsung heroes striving to stabilise the beleaguered construction sector and rein in spiralling costs. As the only profession specialising in the financial intricacies of the industry, their expertise is proving invaluable.
Tsolo explained that QS professionals meticulously craft initial project cost estimates, encompassing labour, materials, time, and profit. This crucial calculation is based on a blend of current market prices, historical data, statistical forecasts, and a keen eye on construction and material price indices. Ideally, these estimates also factor in contingencies (typically 5% to 10% of project value) and escalations to cushion against unforeseen risks and cost surges during project execution.
However, a significant hurdle persists within the public sector: National Treasury’s current stance on contingencies. While designed to boost accountability, the outright refusal to accept such reserves means quantity surveyors are forced into a bureaucratic labyrinth, formally requesting additional funds for every unexpected cost. This, Tsolo argues, not only creates onerous bureaucracy but also exacerbates delays and drives costs even higher. The ASAQS is actively engaging with government departments, alongside other industry bodies, to advocate for more flexible public sector procurement frameworks that can better accommodate price volatility.
Yet, this push for flexibility is complicated by regulatory ambiguity. Tsolo highlighted that while the older “Standard for Infrastructure Procurement and Delivery Management” explicitly disallowed escalations and contingencies (clause 14.5.9), its 2019 replacement, the “Framework for Infrastructure Delivery and Procurement Management,” conspicuously omits any mention of them. This regulatory void creates uncertainty that needs urgent clarity to foster a more responsive procurement environment.
Beyond policy adjustments, the ASAQS also champions a strategic shift towards bolstering local supply chains. While government has encouraged local manufacturing, Tsolo suggests that the US tariffs present a golden opportunity to actively support domestic producers of construction materials through targeted incentives such as tax breaks. Such measures would significantly reduce South Africa’s reliance on volatile imports.
Furthermore, Tsolo advocates for enhanced training for quantity surveyors, integrating global economic indicators into their cost planning methodologies. ASAQS members are already benefiting from continuous professional development programmes and webinars tackling macroeconomic topics, a trend Tsolo believes should be expanded through collaboration with other industry bodies.
“By building resilience, we intend to lessen global economic shocks on the local construction sector,” Tsolo affirmed. “Quantity surveyors are central to this, ensuring that construction projects remain feasible, efficient, and financially sound, even in uncertain times.”
Adding another layer to the conversation, the National Home Builders Registration Council (NHBRC) recently weighed in, acknowledging the impact of high interest rates on affordability and construction costs. In response, the NHBRC is actively championing the adoption of Alternative Building Technology (ABT) and Innovative Building Technologies (IBT). These unconventional methods and materials, assessed for fitness-for-purpose by Agreement SA, offer compelling advantages including reduced construction time, lower lifecycle costs, diminished environmental impact, and exciting new architectural possibilities – a potential beacon of hope in a challenging landscape.