Crime, load-shedding and scandal have remade South Africa’s construction sector

Criminal activity, persistent load‑shedding and weak economic growth have combined to reshape South Africa’s construction industry, contributing to the decline of several large contractors and opening space for smaller firms to take a bigger role in income generation and employment.

What has changed in the sector

Statistics South Africa says the industry has faced multiple pressures over the years, including slow economic growth, low investment, load‑shedding, labour shortages and the Covid‑19 pandemic. Those forces, together with criminal activity, have transformed the make‑up of the sector.

Smaller firms now carry more of the load

Stats SA data show a shift toward smaller businesses. Small and micro enterprises generated 32.2% of total construction income in 2024, up from 25% a decade earlier. Their share of employment also rose: small and micro enterprises accounted for 55.3% of all construction jobs in 2024, compared with 40.6% in 2014. The statistical agency notes that micro enterprises alone were responsible for 44.8% of employment in the sector.

At the same time, the dominance of the largest companies has declined. In 2014 the 100 biggest construction firms generated 40% of industry income; by 2024 that had fallen to 26.7%.

Big names weakened

The difficult operating environment has coincided with the collapse or restructuring of some of South Africa’s largest construction companies. The industry has seen the collapse or restructuring of Group Five and Basil Read, and major restructuring at Murray & Roberts, altering the sector’s composition.

Crime and the so‑called “construction mafia”

Law firm Cliffe Dekker Hofmeyr described an emergence of organised groups that increasingly target construction projects. These groups use extortion, intimidation and site invasions, which the firm says delay developments, drive up costs and undermine investor confidence.

The World Cup collusion scandal

The industry’s decline was also compounded by a damaging collusion scandal linked to construction for the 2010 FIFA World Cup. In 2009 the Competition Commission began investigating allegations of cartel behaviour among builders on the World Cup stadiums, including bid‑rigging, exchanging cover prices and inflating profit margins on at least six stadiums.

Companies that took part in the settlement process included Murray & Roberts, Aveng, WBHO, Group Five and Stefanutti Stocks. In June 2013 the Competition Tribunal reached a fast‑track settlement with 15 builders and issued fines totalling more than R1.5 billion.

The University of Cape Town noted that the City of Cape Town filed civil damages claims worth R428 million against the companies that colluded on the Greenpoint stadium tender, and recorded that:

“The initial estimated budget for the stadium was R2.9 billion, but it ended up costing R4.5 billion.”

Industry size and recovery signs

Construction’s contribution to South Africa’s gross domestic product peaked at 4.2% in 2008 before declining to 2.3% in 2025. In real terms the industry’s value fell from R156 billion in 2016 to R99.1 billion last year, according to Stats SA.

There are, however, signs of partial recovery. Total employment in the industry rose by 12.5% to 539,056 people in 2024 from the 2020 base, though that level remained below the 592,125 jobs recorded in 2017. Construction of buildings delivered the largest employment gains, adding 22,947 jobs between 2020 and 2024. Average annual salaries and wages increased to R171,316 from R150,541 over the same period.

Stats SA summarised the shift in the industry this way:

“Total employment in the construction industry has fluctuated over the years, but without a clear long-term trend.”

And on the broader picture:

“The findings point to an industry that has become less concentrated over the past decade, with smaller firms playing an increasingly important role in generating income and creating employment.”

Regional and structural notes

Gauteng remains the country’s construction hub, accounting for 35.3% of income from services rendered, 32.8% of salaries and wages, and 26.2% of employment. The province’s share of activity has declined since 2020 while the Western Cape and KwaZulu‑Natal have expanded their footprints.

Income and employment split

• Large companies generated 43% of industry income in 2024 but accounted for just 21.4% of employment.
• Small, medium and micro enterprises employed the remaining 78.6% of the sector’s workforce.

The combined effect of criminal targeting of projects, years of load‑shedding and weak economic demand has therefore changed both who builds South Africa’s projects and how many people those companies employ.