The Building Industry Bargaining Council says mutually beneficial negotiations will be crucial if the Western Cape building boom is to continue.
Aside from the Western Cape Government allocating an estimated R18 billion over the next three years to stimulate economic growth and job creation, the province accounts for 34% of the national total of building plans passed, as well as 40% of all buildings completed.
The construction industry, of which the building sector is a significant part, has also been a driver of employment, adding 42 000 new jobs in the third quarter of 2024 – a 20% increase on the previous quarter – reflecting the sector’s resilience and importance in the region’s economic landscape.
According to Danie Hattingh, the Building Industry Bargaining Council’s (BIBC) spokesperson for business, there is a growing number of opportunities for residential properties and complexes and mixed developments, especially in the LSM1-5 segments. Members of the established value chain can respond well to the opportunities created, with the support of their networks, he says.
Further economic opportunities are offered by state entities tasked with delivering sustainable housing solutions, in public-private partnerships, foreign investment in local infrastructure projects, and real estate developments. “Growing awareness of sustainability and energy efficiency also drives demand for eco-friendly and technology-integrated homes,” Hattingh adds.
Unfortunately, addressing urban expansion effectively faces several challenges, notably a culture of non-compliance that has led to the disruption of projects meant to uplift communities and reduce unemployment.
Extortion is also rife in the lower LSM segments, with the involvement of unscrupulous individuals at every stage of the process, from procurement to the active building of units. “This environment leaves law-abiding building industry employers frustrated. Employees who are caught in this system are then also exploited and often earn even less than the national minimum wage,” Hattingh says.
Since the building industry will need to tackle these issues if the boom is to continue, there will need to be far greater collaboration within the sector. It is why he believes bargaining councils will play an even more important role going forward.
Minimum wages
“Bargaining councils negotiate minimum wages that account for the cost of living, industry standards, and economic conditions. These agreements often extend to employers who are not members of the three employer organisations who are parties to the BIBC, ensuring wage fairness across the industry. They also establish industry-specific conditions, such as working hours, rates of pay, and benefits,” he explains.
But, as Hattingh points out, the impact of collective bargaining is felt well beyond the ‘decent work’ aspect in that it contributes to economic growth, social stability, innovation, and encourages ethical business practices in the industry.
Fair wages negotiated through collective bargaining enhance workers’ disposable income, stimulating local businesses and services.
“This is particularly impactful in economically marginalised areas of the Western Cape, where increased consumer activity supports small enterprises. As workers spend more locally, there is a ripple effect on economic growth, creating secondary jobs and encouraging further investments in community development,” Hattingh says.
Labour disputes
“Importantly, collective bargaining also reduces the likelihood of disruptive labour disputes. Peaceful negotiations ensure economic stability and community harmony not just for the building industry, but for all related industries that are reliant on the completion of building projects. There has not been a strike in the building industry in the Greater Cape Peninsula for over 80 years,” Hattingh reveals.
It is no secret that the building boom has stemmed largely from a dire shortage of decent housing and schools for current residents and recent ‘semigrants’ to the Western Cape.
But Hattingh is confident the sector is capable of addressing these issues.
“At the upper end, established actors in the building industry representing the full value chain have carved out a niche and are able to respond to the demand in this segment. The industry can also meet demand at the lower end despite the frequent challenges faced by actors in this segment,” he says.
These role players, he says, understand the importance of encouraging high-rise residential and commercial buildings to maximise space usage and reduce urban sprawl. They also have experience in converting underutilised or older structures into modern, functional spaces to accommodate growing demand without excessive new development.
Hattingh reiterates that with increased attention on unscrupulous contractors and the damage they inflict by creating community conflict and delays of projects, most opportunities are now only being granted to compliant contractors.
“Registration at the BIBC is a first step to demonstrating compliance for all contractors. Developers often prefer working with registered contractors to ensure compliance with industry standards. Non-registered members, meanwhile, may face challenges in securing work on large-scale projects.”
