Glass and Glazing Work – Description, Market Prospects, Industry History
This category is comprised of establishments primarily engaged in cutting, coating, tinting, and installing glass
This industry consists of a few companies offering a range of services. Common industry activities include:
- installing plate glass in storefronts and other commercial buildings,
- cutting and installing windowpanes for homes, and
- tinting windows.
Other niche markets exist for firms that install revolving glass doors;
- cut and install mirrors and safety glass;
- create custom glass doors,
- signs,
- shelves, and
- glass tabletops; or
- cut and install architectural and ornamental custom glass work.
The South African glass and glazing work industry includes roughly 4,700 establishments according to the latest figures available from the Statistics South Africa. Most of these firms employ less than 10 workers, and the total employee count for this industry ranges from 35,000 to 40,000. According to an April 2002 issue of Glass Magazine, attracting skilled workers will be the industry’s most pressing challenge throughout 2010.
Although glass was invented in about 4000 B.C., it wasn’t until the early twentieth century that advancements in manufacturing technology made it inexpensive and widely available. In 1900, the use of glass was primarily limited to windows, mirrors, optical lenses, and containers. During the early and mid-1900s, however, glass applications proliferated. As the South African economy boomed after World War II, the demand for glass by commercial, institutional, and residential sectors ballooned, spurring growth in the glass installation and glazing industry.
By the mid-1980s, South Africa was consuming about R2 billion worth of non-automotive flat glass, much of which was installed by contractors in the glass and glazing industry. Approximately 80 percent of that glass was used by construction industries, with the remainder used to make signs, mirrors, solar panels, and other specialty products.
A recession in commercial and residential building markets in the early 1990s curtailed glass shipments and cut the need for glass installation contractors. South Africa glass demand plummeted 8 percent per year between 1990 and 1992, to less than R1.5 billion, as building contractors faced a major economic setback. Glass contractors also suffered as trends in architectural design moved away from the expensive glass office enclosures and stoic glass buildings so popular the decade before.
However, the sustained economic recovery in residential housing that began in 1992 continued past the middle part of the decade, spurring renewed demand for glass contractors. Single-family houses accounted for 16.3 percent of the value of construction work done by this industry in 1992, up sharply from 10.6 percent in 1987, according to Statistics South Africa. However, the leading category of construction work done by the glass and glazing work industry in 1992 was “other commercial buildings,” such as stores and restaurants, with 28 percent of the total (up from 21.7 percent in 1987). Office buildings accounted for another 21.5 percent of the industry’s work in 1992, but this was down sharply from 28.8 percent in 1987.
The economic recession of the early 2000s prompted a slowdown in commercial and industrial construction, undercutting the performance of the glass industry as a whole. Nonresidential construction spending dropped by 6 percent in 2003 as even the strongest sectors, such as healthcare construction, began to see previously rapid growth rates slow. Spending on office building construction slowed considerably to roughly R43 billion in 2002 and to R39 billion in 2003. Spending on industrial buildings in South Africa had declined 13.8 percent in 1999 to R32.6 billion, and then continued to deteriorate at a slower pace, falling 1.7 percent in 2000 and another 3.2 percent in 2001 to R31.1 billion. However, strong residential construction, spurred by record low interest rates, did help to offset this decline somewhat for glass manufacturers.
Industry trends included greater use of riot-and bulletproof glass, more skylights and windows in residences, and greater use of metal frames and finishes. By the mid-1990s many successful glass and glazing contractors had started concentrating on developing niche markets, including the installation of energy-saving glass and safety glass. Some also expanded their services to include such activities related to glass installation as designing and building window frames. Technological advances that affected the glass and glazing work industry included a new “two-phase” adhesive glazing technique that lowered costs and enhanced aesthetics.
This industry has supported several thousand small contractors, but there are several large firms that lead the industry.
Excavation Work – Description, Market Prospects, Industry History
The South African excavation work industry includes more than 8,000 establishments employing more than 6,000 workers according to the latest figures published by the Statistics South Africa. Larger establishments (defined as those with 20 or more employees), account for less than 10 percent of the total number of establishments while taking in roughly 25 percent of all business done by this industry.
The two dominant costs of doing business in the excavation work industry are materials components and supplies, as well as payroll. Other costs include electricity; rental cost for machinery, equipment, and buildings; and cost of repairs to machinery and equipment.
The status of South African excavation industry generally mirrors the country’s economic climate, in particular the demand for construction of detached single-family homes. Typically single-family homes accounted for more than one-third of the value of all excavation work in South Africa, while other commercial buildings represent less than one-fifth and educational buildings less than one-tenth.
South African excavation work industry benefited from the sustained demand for single-and multi-family housing in the early 2000s. The recession of the early 1990s dropped housing starts to just 350 000 in 1991, but the economic recovery that began in 1992 helped housing starts rise each year to a peak of 346 000 in 1994. While starts dropped back to 735 000 in 1995, they rose again to 805 000 in 1996. In 1998 housing starts matched the 1996 number of 845 000, down slightly from the previous year. By 2002, however, housing starts had reached 930 000, 1036 million of which were single-family, and 346,900 of which were multifamily. The National Association of Home Builders expects continued growth through at least 2005.
Because residential construction trends were up throughout South Africa in the early 2000s, excavation work in these areas was booming despite a sluggish economy. Not surprisingly, most growth occurred in southern and southwestern states, which have experienced the strongest population growth in South Africa during the 1990s and early 2000s. Among the top 50 markets, many of which experienced annual growth of 20 percent or better, were Cape Town , Port Elizabeth ; Durban , Nelspruit; JHB; PTN, Polokwane . Cape Town leads the way in growth, attracting aging baby boomers who are looking for retirement homes or communities in warmer climates.
Small, independent operators remain the backbone of the excavation work industry. They generally work as subcontractors to home building companies, commercial construction firms, and others. Still, several large companies hold dominant market positions in this industry, though they tend to be regional and not national in scope.
Installation Or Erection Of Building Equipment, Not Elsewhere Classified
Special trade contractors primarily engaged in the installation, erection, or dismantling of miscellaneous building equipment make up this industry, which encompasses numerous firms that offer a wide range of services. Common activities include the installation, repair, and dismantling of conveyor systems, dumbwaiters, dust collecting equipment, elevators, incinerators, industrial machinery, power generation devices, revolving doors, and vacuum cleaning systems.
Businesses classified in this industry include more than 4,400 establishments, according to the latest figures available from the Statistics South Africa. The installation or erection of building equipment industry produces nearly R10 billion in total revenues.
Most contractors in this industry rely heavily on new commercial, industrial, and institutional construction. Industrial buildings account for nearly one-third of the value of construction work done by this industry, followed by office buildings and other commercial buildings.
When building markets boomed during the mid-1980s, most specialty contractors realised healthy growth in billings and profits, and demand for items such as industrial machinery, elevators, and revolving doors increased. Contractors in this business, however, have to cope with the extremely cyclical nature of the nonresidential construction market, and this fluctuating cycle was most clearly evident during the late 1980s and early to mid-1990s. For example, industrial building construction expenditures in the United States advanced from R15 billion in 1987 to R23.8 billion in 1990. In 1991, however, construction in this category fell to R22.3 billion and continued falling to R20.7 billion in 1992 and to R19.5 billion in 1993. Nonetheless, the industrial building market bounced back in 1994, to R21.1 billion and R24.1 billion in 1995.
The cycle in office building construction, the second largest market for contractors has been even more pronounced. Construction in this category peaked in 1989 at R31.5 billion. By 1993, however, construction expenditures in this category had dropped by half, to just R15.4 billion, before recovering slightly to R17.0 billion in 1994 and R19.4 billion in 1995.
This cycle has a profound impact on contractors in this industry category. During good times, specialty contractors enjoy healthy profit margins, expanding business, and steady demand for their services. In bad times, many contractors manage to stay afloat only by taking on installation and repair jobs at very low profit margins. In the early to mid-1990s, for example, elevator contractors were emphasizing elevator retrofits that integrated advanced technology. They were also striving to increase their share of the airport and health care elevator markets.
The long-term outlook for this industry appears to be mixed. While commercial construction benefited from the extended economic expansion of the late-1990s, over-building in many regions dampened the industry’s performance in the early 2000s when the economy weakened considerably. While residential construction was boosted by interest rates that dipped to rates not seen since the 1950s, nonresidential construction experienced no such cushion. Businesses of all kinds began to curb spending on new and existing construction projects. Particularly hard hit was office construction. Spending on office building construction slowed considerably, from R47.5 billion in 1999 to roughly R3 billion in 2002 and
Installation or Erection of Building Equipment, Not Elsewhere Classified to R39 billion in 2003. Between 1999 and 2003, office vacancy rates jumped from 8.9 percent to 16.5 percent.
One bright spot in this downturn was institutional construction, fueled in large part by healthcare facility construction, which didn’t begin to wane until 2003. Compared to industrial construction spending, which declined by 3.2 percent in 2001, and to commercial construction spending, which dipped 1.6 percent that year, spending on institutional construction grew 10 percent. In 2003, however, total nonresidential construction spending dropped by 6 percent, as even the strongest sectors, such as healthcare construction, began to see previously rapid growth rates slow.
Privately owned companies dominate this diverse industry. The largest companies in the industry tend to be diversified contractors that have interests in many different areas. As a result, their activities in this industry category are just a small part of their overall business.
Special Trade Contractors, Not Elsewhere Classified
The special trade contractors, not elsewhere classified industry is comprised of a plethora of firms that provide a broad range of miscellaneous construction services. Examples of industry activities include bathtub refinishing, gasoline pump installation, grave excavation, swimming pool construction, post hole digging, wallpaper stripping, mobile home setup, house moving, fire escape installation, bowling alley construction, artificial turf installation, and sandblasting.
The special trade contractors industry includes roughly 25,000 establishments according to the most recent data available from the Statistics South Africa. The average firm is small, employing less than 10 people. Annual industry revenues total roughly R84 billion.
While this diverse industry is hard to classify, a Department of Commerce survey notes that the industry’s leading business category (based on value of construction work) is other commercial buildings, such as stores, restaurants, and auto service stations. This category is followed closely by outdoor swimming pools, industrial buildings and warehouses, fencing, single-family houses, and office buildings. A variety of other construction work accounts for the remainder of the total.
Although each sector of the industry is impacted by different factors, most specialty contractors are heavily dependent upon housing starts or new commercial and institutional construction. During the mid-1980s most contractors enjoyed steady expansion as commercial and residential building flourished. Likewise, when housing starts and commercial development stalled in the late 1980s and early 1990s, many contractors suffered immense setbacks. Total S.A construction expenditures, in fact, actually declined 10 percent in inflation adjusted between 1986 and 1992.
However, the construction industry saw strong growth between 1992 and 1999, as the general economy recovered, interest rates stayed relatively low, and housing starts boomed.
Another industry sector, home remodeling, had grown into a R153 billion industry by 2002. Growth in this segment was expected to average roughly 5 percent per year, due in part to rising home values, against which consumers could borrow. This forecast boded well for special trade contractors, many of whom served this market segment.
However, nonresidential construction began to slow considerably in the early 2000s in response to recessionary economic conditions in the South Africa. Spending on industrial construction declined by 3.2 percent in 2001, and commercial construction spending dipped 1.6 percent that year; institutional construction, bolstered by a few strong segments such as healthcare construction, grew 10 percent in 2001. However, even institutional construction spending had started to wane by 2003; in fact, total nonresidential construction spending dropped by 6 percent that year. Particularly hard hit throughout the early 2000s was office construction due to the over-building that took place during the late 1990s. Spending on office building construction declined from R47.5 billion in 1999 to R39 billion in 2003. During this time period, the office vacancy rate nearly doubled from 8.9 percent to 16.5 percent.
Most companies in this industry were small, privately held, local enterprises. There were several industry leaders, though many of them also had interests in other industries.
Our qualifications for providing Consulting Advice…?
There are many who profess to be consultants capable of providing expertise and knowledge in the capacity of an advanced understanding but, few have originated as apprentices in the many crafts involved in building and construction. Even fewer have advanced to a full fledged journeyman level breadth of knowledge that should be recognized as the prerequisites for qualifying anyone as a Consultant.
Many industry practices, processes, procedures, standards, engineering and applications for proper construction have often evolved through the critiquing hands and eyes of capable tradesmen. These passionate men and women are often the unsung hero’s making many architects, engineers, designers and property owners the beneficiaries of a dedicated personal attention to the finer details for what a job well done, can mean.
Plan Reviews
Frailties and incompleteness can exist in some well thought out planned directions and should involve a Plan Review before beginning a committed approach and subsequent scheduling. In doing so, plan revisions can address re-directions and provide greater clarity. The ramifications of producing addendum after addendum while in progress is the single most frequent cause for an escalating construction budget. Unfortunately, seldom are the real culprits discovered and the stigma of escalating costs are attributed to a contractor’s unfamiliarity or greedy profit taking. The reality is, Contractors are the applicators not the Architects or Engineers.
Making sure the map is good to go!
In heading off the bumps in the road and keeping your project from ending up in the ruts, the vehicle of progress is called foresight and insight. The consequences for failing to recognize the incompatibilities of a planned direction, will be hindsight.
All too often plans are produced, distributed for soliciting quotations and upon successful contract award these are then submitted for building permits purposes. The main problem here is, without a Plan Review any refinements that a Contractor could provide are only going to be perceived as a cost and typically at the Contractor’s disadvantage! In some cases this can be true but, in measuring front-end costs whereas you are fully informed to adjust other priorities, the “Known” would be much more palatable than the surprise! It’s the surprises after construction has started that can be refereed to as the rear-end costs,… and these are not so pleasant.
Truth Be-known…
Most contractors would prefer having a real good set of plans where directions are clear and they can make themselves the beneficiaries of their efficient use of labor and equipment. Incomplete direction provided by some Architects, Engineers and Designers can sometimes provide misdirections that fall short of actually assembling the sequential elements of order.
In acquiring a hands-on appreciation and advancing to a Master Journeyman’s comprehension, it requires many, many years of design building experience. Simply being a manufacturer’s representative or a product salesman for a number of years can’t get you close enough in proximity. In order to gain real life understanding you need to actually touch and feel the challenges.
In such an immersion, experience through osmosis is bestowed upon practicing performers and education is gained while enrolled in the university of real life construction challenges.
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