A cutback in infrastructure spending has been blamed for the local pipe market shrinking by an alarming 15%. This emerged from a survey by the Southern African Plastic Pipe Manufacturers Association (SAPPMA).
CEO Jan Venter said the research showed that significantly fewer funds had been invested in infrastructure and building projects over the past six years, causing the pipe market to shrink.
Although South Africa recorded average GDP growth of 0.8 % per annum during the same period, the amount of money that was invested in building and construction projects as a percentage of GDP had declined sharply.
“Reliable infrastructure is desperately needed in our country to ensure the supply of clean drinking water, uninterrupted sewage services and the provision of electricity, telecommunication and gas services to communities around South Africa,” Venter said.
“We are very concerned that the pipe infrastructure provision is declining on a per capita basis. This is a clear indication that the taxpayer’s money is not being spent where it is supposed to go – despite the promises made by politicians.”
Venter said he was not optimistic about a quick recovery for the industry. “We know from experience that implementation and roll-out take long. Even if the decisions are taken and approved today to invest in new infrastructure or to upgrade the existing pipe networks, it will still take several months before we start seeing the impact and results.
“What is more concerning to us, is that we have also not yet calculated the full impact of the COVID-19 pandemic on the country’s economy, infrastructure spend and therefore also on the pipe industry. Optimistic expectations are that South Africa’s GDP will only recover to 2019 levels by 2023. Rapid recovery is therefore highly unlikely, and we are preparing ourselves for a bumpy ride.”