The South African flooring industry faces some formidable challenges in 2015, says Neil Duncan, Chief Financial Officer of Kevin Bates Albert Carpets (KBAC).
Duncan, a past president of Master Builders Association (MBA) North, says 2014 has been a difficult year with a slowdown in business and margins under pressure. “Although the flooring industry has not experienced direct labour unrest, extended strikes and labour unrest in other sectors have impacted negatively on South Africa’s growth rate which, in turn, impacts on the volume of business available in flooring. The withdrawal of Quantitative Easing by the USA has also impacted negatively on South Africa and other emerging markets.”
Duncan says there is no indication that 2015 will be any easier than 2014 for the entire building and construction industry. “There are some large new developments underway, particularly in the Sandton area, but consumers and the government’s income streams will remain under pressure with tax increases expected in the 2015 budget. The new Construction Regulations, stricter enforcement of Construction Health and Safety, and the new BBBEE codes applicable from May 2015, will all add pressure to companies operating in the flooring industry.
“The flooring sector’s ageing workforce will further reduce the pool of skilled artisans, and skills training is of utmost importance to ensure the sustainability of the industry and address job creation. The flooring industry has taken positive steps in this regard with the formation of the Flooring Industry Training Association (FITA) which has led to several previously unemployed young people receiving training as installers to enter the industry during 2015. FITA also plans on introducing a Recognition of Prior Learning (RPL) programme in 2015 and establishing a register of flooring installers currently working in the industry.
“An improvement in South Africa’s growth rate, combined with a positive economic climate, is essential to ensure the sustainability of the flooring industry. This will unlock growth opportunities for existing and new companies which in turn will lead to job creation. A dramatic increase in the number of tax- paying individuals and companies is required to stimulate growth. This has to be the most important challenge for our government and the private sector in 2015,” Duncan adds.
