july - december 2011 biannual economic and capacity survey

July - December 2011

Biannual Economic and Capacity Survey

Firm distribution based on Annual Turnoverbased on responses received

Category by gross annual income

% of firms

0 – R1,5m 15.2%R1,5m – R11,5m 50.0%

> R11,5m 34.8%Total 100.0%

0-1.510.4%

1.5-11.539.5%

>11.550.1%

Firm distribution based on turnover

Category by gross annual income

% of firms

0 – R1,5m 10.4%R1,5m – R11,5m 39.5%> R11,5m 50.0%Total 100.0%

July - December 2011 January – June 2011

0-1.515.2%

1.5-11.550.0%

>11.534.8%

Firm distribution based on turnover

Economic ImpactCESA Membership earnings % of GDP

Source: RBQN, CESA BECS, Industry Insight

JUN97DEC

97JUN98

JUN99DEC

99JUN00

JUN01DEC

01JUN02

JUN03DEC

03JUN04

JUN05DEC

05JUN06

JUN07DEC

07JUN08

JUN09DEC

09JUN10

JUN11DEC

110.0%

Relationship to Gross Fixed Capital Formation

Source: RBQN, CESA BECS, Industry Insight

Consulting Engineering IndustryFee income, Rm Constant 2000 prices (CPI Deflated) Annualised

Jun-96 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-110

10,000

12,000

Source: CESA BECS

Consulting Engineering IndustryReal Fee income (CPI deflated), 2000 prices: Annual Change

Source: CESA BECS

Jun-97Dec-

-98Dec-

-99Dec-

-00Dec-

-01Dec-

-02Dec-

-03Dec-

-04Dec-

-05Dec-

-06Dec-

-07Dec-

-08Dec-

-09Dec-

-10Dec-

-11Dec-

11-30%

CESA Confidence Index

Source: CESA BECS

% Change (Survey to Survey) Index

Industry Confidence

Source: CESA BECS, BER

10,000

12,000

Confidence

Consulting Engineering IndustryReal Fee income (CPI deflated) vs confidence

Source: CESA BECS

200030004000500060007000800090001000011000120001300014000150001600017000180001900020000Confidence Fee income Current prices

ill, c

Consulting Engineering IndustryNominal Fee income vs confidence

Source: CESA BECS

CESA Labour Cost Indicator: Y-Y Change

Source: CESA BECS

Jun-98

Jun-99

Jun-00

Jun-01

Jun-02

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

Consulting Engineering IndustryEmployment vs REAL fee income (CPI / LCI Deflated)

Source: CESA BECS

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

10,000

11,000

12,000

10,500

12,500

14,500

16,500

18,500

20,500

Income: CPI 2000 prices Income : CESA LCI 2005 pricesEmployment Revised (right axis)

Consulting Engineering IndustryEmployment vs Salary / Wage bill

Source: CESA BECS

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

10,000

15,000

20,000

25,000Salary/Wage bill (Constant) Employment - right axis

Discounting

Question: What is the prevailing discount being offered in a tendering situation to clients by your firm, benchmarked against the ECSA Guideline Fee Scales?

39% of firmsdiscounted by 20% or more

Source: CESA BECS

JUN07 DEC07 JUN08 DEC08 JUN09 DEC09 JUN10 DEC10 JUN11 DEC110.00%

10.00%

15.00%

20.00%

25.00%

Fee income earned by Sub-disciplines: % ShareDecember 2011

AgriculturalArchitecture

Mechanical building ServicesCivil

Electrical / ElectronicEnvironmental

FacilitiesGeotechnical

Industrial Process / ChemicalGIS

Hydraulics

Information Systems / Technology

MarineMechanical

MiningProject Management

Quantity SurveyingStructural

Town planning

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Question: What type of work did your company engage in during the past 6 months?

Source: CESA BECS

Fee income earned by Sub-disciplines: % ShareChange in market share in the last 12 months

AgriculturalArchitecture

Mechanical building ServicesCivil

Electrical / ElectronicEnvironmental

FacilitiesGeotechnical

Industrial Process / ChemicalGIS

HydraulicsInformation Systems / Technology

MarineMechanical

MiningProject Management

Quantity SurveyingStructural

Town planning

-6% -4% -2% 0% 2% 4% 6% 8% 10%

Source: CESA BECS

Fee income earned by Top four disciplines: R mill 2000 pricesAnnual average: 2002 – 2011

Source: CESA BECS

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

6,000Structural Proj Mang Mining Civil - right axis

Fee income earned by economic sectorPercentage market share June 2012 – December 2011

Income distribution per economic sector

Source: CESA BECS

Transp

ortati

Mining

rrying

Health

Housin

Commerc

Agricu

/ Fore

stry /

Fishin

r0.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

Jun-10 Dec-10 Jun-11 Dec-11

Fee earnings by selected sectorSmoothed |2 survey average

DEC06 JUN07 DEC07 JUN08 DEC08 JUN09 DEC09 JUN10 DEC10 JUN11 DEC110

WaterTransportationEnergyHousingCommercialWater

Transportation

Commercial

Housing

Energy

Source: CESA BECS

Fee earnings by sectorRm Constant prices

JUN07 DEC07 JUN08 DEC08 JUN09 DEC09 JUN10 DEC10 JUN11 DEC110

10,000

12,000

OtherAgriculture / Forestry / FishingCommercialHousingTourism/LeisureHealthEducationMining / QuarryingEnergyTransportationWater

Source: CESA BECS

Fee income earned by key economic sectorsJune 2005 – June 2011

Jun-05Jan

g-06Mar-

07Oct-

07May-

08Dec-

-09Feb

p-10Ap

r-11Nov-

200400600800

1,0001,2001,4001,600

Housing

Jun-05Jan

g-06Mar-

07Oct-

07May-

08Dec-

-09Feb

p-10Ap

r-11Nov-

200400600800

1,0001,2001,4001,6001,8002,000

Jun-05

Feb-06

Oct-06

Jun-07

Feb-08

Oct-08

Jun-09

Feb-10

Oct-10

Jun-11

1,0001,5002,0002,5003,0003,5004,0004,500

Transportation

Jun-05Jan

g-06Mar-

07Oct-

07May-

08Dec-

-09Feb

p-10Ap

r-11Nov-

200400600800

1,0001,2001,4001,600

Energy

Jun-05

Feb-06

Oct-06Jun

-07Feb

-08Oct-

-09Feb

-10Oct-

5001,0001,5002,0002,5003,000

Commercial

Jun-05

Jan-06Au

g-06Mar-

07Oct-

07May-

08Dec-

-09Feb

p-10Ap

r-11Nov-

50100150200250300

Health

Source: CESA BECS

N-W Lim

% Share Change last 12 months

Provincial Market Share: June 2011Vs change in market share from December 2010

Income distribution per province

Source: CESA BECS

Fee income earned by provinceHigh Capacity economies |Annualised smoothed

Dec-98Jun

Dec-99Jun-00

Dec-00Jun-01

Dec-01Jun

Dec-02Jun-03

Dec-03Jun-04

Dec-04Jun-05

Dec-05Jun-06

Dec-06Jun-07

Dec-07Jun

Dec-08Jun-09

Dec-09Jun-10

Dec-10Jun

Dec-11

Eastern Cape Western Cape Gauteng Kwazulu Natal

Source: CESA BECS

Fee income earned (Constant 2000 prices)High Capacity vs lower capacity provincial economies |Smoothed

Dec-98

Jun-99

Dec-99

Jun-00

Dec-00

Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Jun-11

Dec-11

100.00

150.00

200.00

250.00

300.00

High Capacity Lower CapacityIndex Dec-98=100

83% of fees were earned in high capacity provinces

Source: CESA BECS

Fee income earned : RSA vs EX-RSAR mill, 2000 prices | Annualised, smoothed

Dec-98Jun

-99Dec-

-00Dec-

-01Dec-

-02Dec-

-03Dec-

-04Dec-

-05Dec-

-06Dec-

-07Dec-

-08Dec-

-09Dec-

-10Dec-

-11Dec-

10,000Ex-RSA - left axis RSA - right axis

87% of fees were earned in South Africa

Source: CESA BECS

Fee income earned by type of client% Share – July – December 2011

Local (SA) Income distribution per fee paying client type, during the past 6 months

Central5%

Provincial8%

Local26%

Parastatals14%

Private47%

Source: CESA BECS

Fee income earned by type of client% Share

Central Provincial Local Parastatals Private0.0

60.0Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11

Source: CESA BECS

Fee income earned by type of clientR mill 2000 prices | Annualised, smoothed - avg over 2 survey periods

Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Jun-11

Dec-11

5,000Central Provincial Local Parastatals Private

Source: CESA BECS

Fee income earned by type of clientConstant 2000 prices | Annualised, smoothed - average over 2 survey periods

Jun-01Dec-

-02Dec-

-03Dec-

-04Dec-

-05Dec-

-06Dec-

-07Dec-

-08Dec-

-09Dec-

-10Dec-

-11Dec-

7000Public Private

Source: CESA BECS

Competition in tendering

During July – December 2011 competition for work was (Tick selection)

DEC06 JUN07 DEC07 JUN08 DEC08 JUN09 DEC09 JUN10 DEC10 JUN11 DEC110.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Very Low Low Keen Very Keen Fierce

Source: CESA BECS

Competition in tendering

During July – December 2011 competition for work was (Tick selection)

Jun-00Dec-

-Jun01

-Dec02

-Jun02

-Dec03

-Jun03

-Dec04

-Jun04

-Dec05

-Jun05

-Dec06

-Jun06

-Dec07

-Jun07

-Dec08

-Jun08

-Dec09

-Jun09

-Dec10

01-Dec2

Jun-11Dec-

1186.0%

100.0%

102.0%

Source: CESA BECS

% of Firms wanting to increase staff

New June 2005 survey

Eng O Tech Technologist Technicians Support staff0.0

Source: CESA BECS

Engineering Skills Shortfall

Dec-97

Jun-9801

-Dec01

01-Dec

-00Dec

01-Dec

-Jun02

-Dec03

-Jun03

-Dec04

-Jun04

-Dec05

-Jun05

-Dec06

-Jun06

-Dec07

-Jun07

-Dec08

-Jun08

-Dec09

-Jun09

-Dec10

-Jun10

-DecJun

-11Dec

-110.0

% Wanting to increase engineers% of firms experiencing difficulties in recruiting engineers

Source: CESA BECS

Recruitment problems

O Tech

ologis

icians

Source: CESA BECS

Changes in Dec’11 questionnaire to split recruitment problems by male / female. Comparisons to previous surveys no longer availalbe

Recruitment problems by genderNew addition December 2011 survey

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Source: CESA BECS

Bursaries% of Salary / Wage bill

Dec-96

Jun-11

Source: CESA BECS

BursariesR mill 2000 prices (Annualised)

Dec-96

Jun-11

Source: CESA BECS

Training (Salaries and Direct Training Costs) % of Payroll

Jun'05 Dec'05 Jun'06 Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10 Dec'10 Jun'11 Dec'110.0%

eSource: CESA BECS

Training (Salaries and Direct Training Costs) Rand millions, Constant 2000 prices

Jun'05 Dec'05 Jun'06 Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10 Dec'10 Jun'11 Dec'110.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

eSource: CESA BECS

Training (Direct costs)% of Payroll

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Source: CESA BECS

Training (Direct costs)Rand millions, Constant 2000 prices

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Source: CESA BECS

Net % Change Utilisation

Industry Capacity UtilisationOf existing technical staff

Source: CESA BECS

Fee income outstanding for longer than 90 daysDecember 2011

Source: CESA BECS

Total fee income outstanding for longer than 90 days% of total fee income earned Including foreign clients

Dec-99

Jun-00

Dec-00

Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Jun-11

Dec-11

Source: CESA BECS

Escalation trendsYear-on-Year % Change

% 8.7 6.9 5.8 5.3 5.7 9.2 5.9 1.4 3.4 4.6 6.6 11.6 7.13 4.3 5 6.2 5.3 5.1 5.9

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Based on headline consumer inflation

(CPI)Forecasts Industry

Insight Economist Poll

09Source: CESA BECS

Consulting Engineering ProfessionLabour unit cost indicator: Year-on-Year % Change (Smoothed)

LUC 15.2% 11.4% 22.5%21.8% 9.2% -1.9% 3.7% 15.0% 8.0% 2.9% 4.3% 14.3% 21.5% 11.3% 5.3% 7.2% 9.5% 10.6% 9.1% 10.2% 17.8% 25.5%20.6%10.7% 4.3% 7.8% 8.5% 1.50%

J un-98

Dec-98

J un-99

Dec-99

J un-00

Dec-00

J un-01

Dec-01

J un-02

Dec-02

J un-03

Dec-03

J un-04

Dec-04

J un-05

Dec-05

J un-06

Dec-06

J un-07

Dec-07

J un-08

Dec-08

J un-09

Dec-09

J un-10

Dec-10

J un-11

Dec-11

Source: CESA BECS

Consulting Engineering ProfessionLabour unit cost indicator: Annual Average Y-Y Chg

LUC 22.2% 3.7% 9.4% 5.4% 9.3% 16.3% 6.30% 10% 9.65% 21.67% 15.64% 4.30% 7.80% 8.50% 1.50%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jun-10 Dec-10 Jun-11 Dec-11

Source: CESA BECS

Typical Employment BreakdownJuly – December 2011

Professional Engineer Pr.Eng

Professional Architects

Professional Quantity Surveyors

Professional Other

Technologists Pr TEchENg

Technicians PrTechni

Unregistered technical staff: Engineer

Unregistered technical staff: Technologist

Unregistered technical staff: Technician

Unregistered technical staff: Other

Technical Assistants

Draughtspersons

Laboratory / Survey Assistants

Administration / Support staff

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Black Coloured Asian White

Source: CESA BECS

Typical Employment profile: December 2011

Total employment 19 618

Source: CESA BECS

Dec-04Jun-05

Dec-05Jun-06

Dec-06Dec-07Jun-08

Dec-08Jun-09

Dec-09Jun-10

Dec-10

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Black Coloured Asian White

Overall Employment Breakdown, by raceJune 2004 – December 2011

Source: CESA BECS

%Employment profile: Black only (excluding Asian / Coloureds) representation of total employment % Share of total employment

Source: CESA BECS

Professional Indemnity InsuranceRisk profile

Jun-09 71.4% 28.6% 0.0%Dec-09 75.0% 17.5% 7.5%Dec-10 66.7% 33.3% 0.0%Jun-11 60.0% 37.8% 2.2%Dec-11 78.16% 18.39% 3.45%

Low Medium High

Source: CESA BECS

100%JU

Pty Ltd CC Partnership

Equity Distribution by firm type

Source: CESA BECS

Ownership / Equity: % Share of total employmentPTY, CC & Partnerships

Source: CESA BECS

Black equity as % of total equity 2 per. Mov. Avg. (Black equity as % of total equity)

Black Ownership / Equity: % Share of total ownership / equityPTY, CC & Partnerships

Black, including Asian & ColouredSource: CESA BECS

DEC07 DEC08 DEC09 DEC10 JUN11 DEC110.00%

10.00%

WomenBlack women

Black including Coloured & Asian

Women contribution to ownership and equity% of total ownership / equity (PTY, CC and Partnerships)

Source: CESA BECS

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Pty_exec

Pty_nonexec

Member of CC

Partner

Dec-08 Dec-09 Dec-10 Jun-11 Dec-11

Dec-11 20.80% 85.70% 36.50% 14.30%Jun-11 15.3% 55.2% 37.0% 22.2%Dec-10 15.2% 35.9% 45.5% 12.5%Dec-09 19.6% 88.9% 51.8% 0.0%Dec-08 13.5% 81.5% 36.8% 0.0%

Pty_exec Pty_nonexec Member of CC Partner

Black ownership / equity as % of total ownership / equity by type of companyDecember 2008 – December 2011

Black includes Asian and Coloureds

Source: CESA BECS

100.0%

120.0%

Jun-08 100.0% 72.7% 94.4% 75.0% 84.0%Dec-08 100.0% 93.0% 100.0% 75.0% 84.0%Jun-09 100.0% 93.3% 100.0% 75.0% 93.0%Dec-09 100.0% 100.0% 100.0% 100.0% 100.0%Dec-10 100.0% 93.0% 100.0% 100.0% 97.4%Jun-11 92.0% 100.0% 100.0% 87.0% 95.0%Dec-11 100.00% 93.10% 92.00% 77.30% 89.90%

Large Medium Small Micro Total

Quality Management System

Source: CESA BECS

100.0%

Jun-08 81.8% 36.0% 11.0% 0.0% 30.1%Dec-08 87.5% 46.7% 20.0% 0.0% 42.0%Jun-09 90.0% 20.0% 20.0% 12.5% 34.8%Dec-09 90.9% 42.1% 14.3% 16.7% 45.2%Dec-10 92.3% 25.0% 0.0% 20.0% 45.0%Jun-11 53.8% 55.6% 57.1% 12.5% 47.8%Dec-11 84.60% 37.90% 29.20% 9.10% 35.20%

Large Medium Small Micro Total

ISO 9001:2008 Certificate

Source: CESA BECS

Thank youwww.cesa.co.za

Tel: 011 463 2022

july - december 2011 biannual economic and capacity survey

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