South Africa's Unsteady COVID-hit Architecture sector
The world continues to struggle as the pandemic puts a hold on most economic activity. In South Africa, tourism, trade, and technology sectors are all under severe strain as the country goes into its third month of lockdown.
If we narrow our focus down to just the architectural industry, we see how professionals have had to forego any new projects as the government have banned most non-essential business over the last few months. Most architecture projects have come to a sudden halt as clients are hesitant to make any decisions or invest resources in times of uncertainty.
South Africa is expected to layoff around 120 000 to 140 000 working professionals in the construction sector in 2020 due to the pandemic. You can find out more about the planned retrenchment over the next few months here: https://www.sacapsa.com/news/511970/
One architect was quoted saying that he has ‘two small residential projects that he is supposed to conclude and get paid for soon. On the one project he needed information from the municipality and he went there just a few days before lockdown and the municipal team had already closed’.
In the province of Gauteng, there is a backlog of enquires and approvals from the council. The Johannesburg city council building has closed for the last two months. This was already an issue due to poor management and insufficient resources, but has worsened because of the pandemic. Municipal processes are typically manually made, and most councils have not yet adapted or fully rolled out an online system.
Another professional added: “I also happen to be part of the professional team that is involved on an RDP project in Mpumalanga. I and the team went through stage 1 process/ approval for a period of about 6months and the project was approved and signed off mid-March. We were supposed to start with the designs and construction soon and now everything has been put on hold including payments. So in short one doesn’t have a cash flow due to the pandemic.”.
What happens if the lockdown is extended or the situation worsens? Well, for many architecture firms, it could result in further layoffs and a declining client base. Many projects have already had massive delays, and clients are pushing back on because they, themselves, are struggling to hold onto the capital.
Further, we see construction sites closing down, local municipalities delaying approval of plans, cancellations of tender clarification meetings, and work inspections freezing. It is not feasible for staff to work remotely as the construction industry relies on manual labour.
It is crucial that international cooperation and knowledge-sharing takes place, as other countries manage to handle the outbreak and bounce back into the “new normal”. The publisher, Building Design and Construction, has shared success stories and challenges for the industry on their website.
It is not an easy time for the architectural industry, nor similar ones, in South Africa. In the short term, small businesses will struggle to maintain cashflow and retain projects. Despite what is going on, the government has urged business owners to remain positive and trust in the economy to bounce back. Special schemes are popping up to support both large corporations and SMEs.
Architects should focus on cost-cutting initiatives, open up channels of communication, and be visionary when it comes to planning projects. Activity is expected to return to positive growth in 2021. More to follow.
