The recently released results of the annual South African Association of Consulting Engineers' (SAACE) Management Information Survey (MIS) for the period January to June 2007, indicate once again that gross fixed capital formation (GFCF) has shown strong growth in the context of a healthy and expanding economy (GDP 4,7%). Gross fee earnings and profitability were substantially higher for the period than firms' expectations, boding well for a healthy consulting engineering sector, faced with increased demands and pressures for upward movement on salaries. Amidst rising capacity, fee income has increased by 13,7% year on year.
Staff numbers continue to rise and are now estimated to be in the region of 15 807, up from 14 912 in the previous period, while it is further estimated that these figures may in fact be understated. Considerable attention was experienced on the supply side in obtaining the necessary skills, with difficulties being experienced in all categories including engineers, technologists and technicians, whether in the PDI category or not.
Mergers and acquisitions are becoming more prevalent with a tendency for the larger firms to become even larger.
Capacity utilisation is once again running close to 100% and cannot continue to increase exponentially without an increase in resources. An interesting point to note is that despite the significant increase in workload, competition in tendering remains keen with many firms resorting to discounting of fees to obtain work, despite the damage to long term business sustainability. In order to address this issue, the SAACE is convening a Procurement Indaba early in the new year to critically examine the procurement model with a view to producing a set of pricing guidelines for members and clients.
Significant investment in bursaries and training continued, with more emphasis on bursaries to ensure long term growth in capacity. Annualised contributions to bursaries and training amounted to some R96 million. Delayed payments, although marginally improved, remain unacceptably high, particularly with regard to foreign ex-South African work. Interestingly, cross border earnings have increased by 50% despite the buoyant conditions at home. Black ownership continued to grow despite the paucity of skills and experience in this area.
On a positive note, the overall service of SAACE and its Directorate continues to be rated highly among member firms.
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