Abstract
The Reconstruction and Development Programme (RDP) is an attempt by the South African government to redress the imbalances of apartheid. It has many facets. One of these involves the provision and distribution of infrastructure to citizens who hitherto have been neglected. This calls for significant construction effort particularly for housing, water, roads and other social construction. This will require efficient production, and allocation of resources to ensure that there is adequate supply of materials to meet the likely increase in demand. This paper examines the expected demand for construction materials, assesses the supply capacity of South African suppliers of construction materials, and develops an econometric model which can be used to evaluate the impact that growth of the internal construction activity will have on construction industry suppliers.
Highlights
The role of construction as part of Keynesian economic policy has been debated, by for example Coates and Hillard (1987) and Fishlow (1995)
The objective of this paper is to provide an analysis of recent trends and patterns within the construction industry of the Southern Africa region and develop a framework to conduct an econometric analysis of the South Africa construction material demand-supply position
It is quite clear that the RSA construction sector is the major determinant of the derived-demand level for RSA construction materials
Summary
The role of construction as part of Keynesian economic policy has been debated, by for example Coates and Hillard (1987) and Fishlow (1995) Some, such as Easterley and Vierra da Cunha (1994) and Tanzi (1996), see specific industrial sector focus, unwarranted by potential for positive expected financial returns, to be a distortion of incentives and a form of fiscal laxity. They consider pump-priming (greater expenditure by government on public works on construction as a method of stimulating economic growth) to be inefficient; detrimental, to long term growth.
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