The building industry and social transformation (april 2012)

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The role of politics and political pronunciations on the building industry.

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The building industry and social transformation (april 2012)

  1. 1. THE STRATEGIC FORUM www.strategicforum.co.za Studium Ad Prosperandum •• BUILDING RESEARCH BUILDING RESEARCH BMI BMI STRATEGY CONSULTING STRATEGY CONSULTING UNIT cc UNIT cc  Voluntas in Conveniendum Reg. No. 2002/105109/23 THE STRATEGIC FORUM A place of assembly for strategic conversations Towards Making sense of the Building-, Construction- and Property-Industry: THE ROLE OF POLITICS ON THE BUILDING INDUSTRY Dr. Llewellyn B. Lewis APRIL 2012BMI-BRSCU © BMI-BRSCU
  2. 2. www.strategicforum.co.za PROPERTY OWNERSHIP LISTED PROPERTY SECTOR ENGINE FOR GROWTH EMPLOYMENT MARKET CAPITALISATION AND WEALTH CREATION IN BUILDING & CONSTRUCTION > R100 BILLION R3,8 TRILLION RES PROPERTY > 1 000 000 PEOPLE R1,3 TRILLION NON RES PROPERTYPRIMARY AND SECONDARY PROPERTY MARKET ANNUAL HOUSING NEED URBAN HOUSING R267 BILLION PA MORTGAGE BACKLOG > 2,3 MILLION ADVANCES PA (POP. GROWTH ONLY) UNITS IN 2010 R1000 BIO MORTGAGES O/S 250 000 INTEGRATED HOUSING FTHB SUBSIDIES (1,9% OF BUDGET = R13,8 BILLION) RESIDENTIAL AND BUILDING INV. (500 000 HOUSING UNITS) NON RES BPP AND R108,5* BILLION INVESTMENT IN AFFORDABLE HOUSING BUILDINGS COMPLETED (BC) (20,8% OF GFCF) (R1,4 TRILLION 2010-2020) GOVERNMENT BUDGET GFCF GDP R798,9 BILLION R521,6 BILLION R2663 BILLION (22% OF GDP) (30% OF GDP) GOVERNMENT CONSTR. INV. TRANSFER DUTY INFRASTRUCTURE SPEND R174,9 BILLION R8- R9 BILLION PA (R846 BILLION 2010-2020) (33,5% OF GDFI) * When the UNRECORDED Home Improvement and Affordable Housing is taken into account Building Investment = 30,5% of GFCF © © BMI-BRSCU BMI-BRSCU
  3. 3. www.strategicforum.co.za PROPERTY OWNERSHIP LISTED PROPERTY SECTOR ENGINE FOR GROWTH EMPLOYMENT MARKET CAPITALISATION It is estimated that for every R1 CONSTRUCTION AND WEALTH CREATION IN BUILDING & spent on > R100 BILLION R3,8 TRILLION RES PROPERTY“Unless the Housing Market infrastructure, R1.40 is added to aPEOPLE R1,3 TRILLION NON RES PROPERTY > 1 000 000 country’srecovers, the Economy will not gross domestic product. PPP’s are the idealPRIMARY AND SECONDARY PROPERTYrecover.” (Warren Buffet, CNN, 4 October vehicle for funding the gaps in infrastructure MARKET ANNUAL HOUSING2011) R267 BILLION PA MORTGAGE NEEDAfrica. (Deloittes research, May 2011) in URBAN HOUSING (POP. GROWTH ONLY) BACKLOG > 1,5 MILLION ADVANCES PA UNITS IN 2010 R1000 BIO MORTGAGES O/S 250 000 INTEGRATED HOUSING FTHB SUBSIDIES (1,9% OF BUDGET = R13,8 BILLION) RESIDENTIAL AND BUILDING INV. (500 000 HOUSING UNITS) NON RES BPP AND R108,5* BILLION INVESTMENT IN AFFORDABLE HOUSING BUILDINGS COMPLETED (BC) (20,8% OF GFCF) (R1,4 TRILLION 2010-2020) GOVERNMENT BUDGET GFCF GDP R798,9 BILLION R521,6 BILLIONThe UK Government plan to promote R2663 BILLION (22% OF GDP) (30% OF GDP)building. “It clearly has recognised theneed to boost house building, both to GOVERNMENT CONSTR. INV.addressTRANSFER DUTY crisis and to the housing INFRASTRUCTURE SPEND R174,9 BILLION R8- R9 BILLION PAcreate jobs.” (Business Day, 22 November 2011) (R846 BILLION 2010-2020) (33,5% OF GDFI) * When the UNRECORDED Home Improvement and Affordable Housing is taken into account Building Investment = 30,5% of GFCF © © BMI-BRSCU BMI-BRSCU
  4. 4. MAKING SENSE OF THE FUTURE www.strategicforum.co.za The STRATEGIC FORUM Scenarios FOR THE BUILDING INDUSTRY: 2008-2020 HIGH ROAD COLUMBUS SCENARIO Property a PREFERRED Investment Home Ownership PREFERRED Trends in the Building Industry are inextricably BUOYANT GROWTH responsive to, and influenced by INVESTMENT CLIMATE, Backlogs eliminated by 2015 BOUYANT GROWTH INVESTOR CONFIDENCE and PROPERTY DELIVERY. > 5 % PA GDFI > 25 % UPPER MIDDLE ROAD Investor Confidence OF GDP APOLLO SCENARIO SUBSIDIES 3 - 5 % OF BUDGET Property a GOOD Investment Home Ownership DESIRED AVERAGE GROWTH AVERAGE GROWTH 2 - 5 % PA GDFI 20 - 25 % Erosion of Backlogs OF GDP SUBSIDIES LOWER MIDDLE ROAD 2 - 3 % OF BUDGET SOYUZ SCENARIO LOW GROWTH Property an AVERAGE Investment 0 - 2 % PA Home Ownership QUESTIONED GDFI 15 - 20 % OF GDP LOW GROWTH SUBSIDIES Keeping pace with Population 1 - 2 % OF BUDGET NEGATIVE GROWTH LOW ROAD < 0 % PA CHALLENGER SCENARIO GDFI < 15 % Property a POOR Investment OF GDP SUBSIDIES Home Ownership AVOIDED < 1 % OF BUDGET NEGATIVE GROWTH Investment Climate Increasing BACKLOGS PROPERTY A POOR INVESTMENT / AVERAGE / GOOD / A PREFERRED INVESTMENTBMI-BRSCU Paradigm Regression Paradigm Paralysis Paradigm Shift Paradigm Reinvention
  5. 5. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.zaThe MFA Composite Leading Indicator for the South African Building Industry (CLIBI)recorded a peak of 69 in late 2004. The index dropped to 26 in 2009, reflecting a lowerturning point. This building indicator then moved sideways during the next eighteenmonths. It rose to a level of 33 in the fourth quarter of 2011. The current reading forthe first quarter of 2012 is 37. This finding suggests that the long-awaited revival in theSouth African building industry is presently underway. ?
  6. 6. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.za George A. Akerlof is the Daniel E. Koshland Sr. Distinguished Professor of Economics at the University of California, Berkeley. He was awarded the 2001 Nobel Prize in Economics. Robert Shiller is the best-selling Author of Irrational Exuberance and The Subprime Solution (both Princeton). He is the Arthur M. Okun Professor of Economics at Yale University.BMI-BRSCU
  7. 7. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.za How the Macro Economy behaves Rational Economic theory incorporating Conventional Economic Theory “Animal Spirits”. Akerlof & Shiller believe that the answers to the most important questions regarding how the macro economy behaves and what we ought to do when it misbehaves lie largely Economic theory incorporating Economic theory incorporating (though not exclusively) within the three white “Animal Spirits”. boxes)“Animal Spirits”.RESPONSIrrational Non Economic Economic MOTIVES © BMI-BRSCU
  8. 8. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.za How the Macro Economy behaves• The current model fills only the top right hand box; it answers the question: How does the economy behave if people only have economic motives and if they respond to them rationally?• But that leads immediately to three more questions, corresponding to the three blank boxes: How does the economy behave with non- economic motives and rational responses? With economic motives and irrational responses? With non-economic motives and irrational responses?• Akerlof & Shiller believe that the answers to the most important questions regarding how the macro economy behaves and what we ought to do when it misbehaves lie largely (though not exclusively) within those three blank boxes)• Their description of the economy fits the qualitative as well as the quantitative facts, better than a macro-economics that leaves out irrational behaviour and non-economic motives.• Thus, they occasionally use statistics but for the most part, rely on history and on stories. (Akerlof & Shiller: 2009: 168)
  9. 9. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.za We are facing the same problem today as in the later years of the Great Depression – business today is inhibited by uncertainty aboutAnimal Spirits drive almost everything. the future, about the tolerance of anAnimal Spirits are more than angry public, about a disaffected labourjust confidence as force, and about what further government actions may be coming.measured by confidenceindicators. Animal Spirits are the forces that drives all of this. Five psychological factors are of particularDeclining Animal Spirits are the principal importance;reason for the recent severe economiccrisis. 1. Confidence; 2. Fairness;(Akerlof and Shiller: 2009: vii) 3. Corruption and bad faith; 4. Money illusion; and 5. Stories. (Akerlof and Shiller: 2009: ix) © BMI-BRSCU
  10. 10. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.za If this is what we mean by confidence, then we see immediately why, if it varies over time, itA confident prediction is one that projects should play a major role in the business cycle.the future to be rosy; an unconfident Why?prediction projects the future as bleak. In good times, people trust. They make decisions spontaneously. They know instinctively thatBut if we look up confidence in the they will be successful. They suspend theirdictionary, we see that it is more than a suspicions.prediction. The dictionary says that it means Asset values will be high and perhaps also“trust” or “full belief”. increasing. As long as people remain trusting, their impulsiveness will not beThe word comes from the Latin evident.“fido”, meaning “I trust”. But then, when the confidence disappears, the tide goes out. The nakedness of their decisionsThe confidence crisis that we are in at the stand revealed.moment is also called a “credit crisis”. The When people are confident, they go out and buy;word “credit” derives from the Latin when they are unconfident they“credo”, meaning “I believe”. (Akerlof and withdraw, and they sell.Shiller: 2009: 12) Economic history is full of such cycles of confidence followed by withdrawal (Akerlof and Shiller: 2009: 12,13) © BMI-BRSCU
  11. 11. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.za The real problem is the conventional wisdom that underlies so much of current economic theory.The theory of animal spirits provides an So many members of the macro economics andanswer to a conundrum: finance profession have gone so far in the direction of rational expectations and efficient markets, that they fail to consider the most1. Why did most of us utterly fail to important dynamics underlying economicforesee the current economic crisis? crises. Failing to incorporate animal spirits into2. How can we understand this the model, can blind us to the real sources of trouble. (Akerlof & Shiller : 2009 : 167)crisis, when it seems to have come out of theblue with no cause? What has happened in the current financial3. Why have the measures to forestall crisis, corresponds to what causes most of ourit falling short, while the economic authorities economic ups and downs: over-confidence followed by under-confidence. The story inpublically express surprise at their this case was that the price of housing hadineffectiveness? never declined (that is only a story, and it is actually untrue) and therefore, that it would just continue to go up and up. There wasWe need to answer these questions if we are nothing to lose. This is the story of our time; itto feel any confidence in economic policy in is the story of the business cycle that began inthe (future). (Akerlof and Shiller: 2009: 167) 2001. (Akerlof & Shiller, 2009 : 170) © BMI-BRSCU
  12. 12. ANIMAL SPIRITS AND CONFIDENCE www.strategicforum.co.zaFor some reason in the late 1990s and early 2000s, the idea that homes andapartments were spectacular investments, gained a stronghold on the publicimagination in the United States and many other countries as well.Not only did prices escalate, but there was palpable excitement about real estateinvestments; one could see the animal spirits in actioneverywhere.It was the biggest home price boom in U.S. history. It extended over nearly adecade, beginning in the late 1990s.Prices nearly doubled before the bust began in 2006. While it lasted, this spectacularboom mirrored in other countries as well, helped drive the entire worldeconomy and its stock markets.In its wake, it has left the biggest real estate crisis since the 1930s. The so-calledsub-prime crisis, as well as a global financial crisis, the full dimensions of which stillhave to be grasped. (Akerlof and Shiller: 2009: 149) © BMI-BRSCU
  13. 13. COURAGEOUS LEADERSHIP www.strategicforum.co.zaIt is hoped that business leaders will also find their voices to speak out boldly. Inthis regard, the recent comments by Dr Johann Rupert to the Anton Rupertmemorial lecture, was enlightening. “I’ve kept my word to Mamphela Ramphele, who said that whites should start speaking out a little bit without having the fear of being branded racists.”Quoting from his own experience he went on to say that even “Big Business withGovernment” meetings were orchestrated “powerpoint exchanges”. It was notfrank dialogue. “And whenever any of us wanted to speak out our fellow businessmen made sure that we were kept quiet. So even the business leaders were very reluctant to criticise, preferring the lobbying route.” (Business Times, 26 October 2008). BMI-BRSCU
  14. 14. COURAGEOUS LEADERSHIP www.strategicforum.co.za Ramphele said it was astounding that SA’s business sector had remained largely silent, even on failures that directly affected it. This included the system of 23 sectoral education and training authorities (Setas), funded by a levy of 1% of payroll for businesses with an annual turnover of more than R500 000, that was “clearly not working”. (Business Day, 3 December 2008) The Setas, the labour department’s near-destruction of SA’s working apprenticeship system and SA’s further education and training (FET) colleges were producing “unemployable” graduates. This was because there was not enough synergy between the college curricula and industry needs. “The private sector is too scared to upset (the government) ... but its silence is creating the seeds of social instability. Our people can’t read, write, or be usefully engaged,” she said. (Business Day, 3 December 2008)BMI-BRSCU
  15. 15. COURAGEOUS LEADERSHIP www.strategicforum.co.za“We need more civil society mobilisation. We can’t let peoplelie to us about what they are going to do with our taxes, andkeep on voting for them.”What SA required was strong leadership of the enabling kind, insteadof the traditional authoritarian kind, Ramphele said. The country’s leadershipneeded to create a milieu in which South Africans could commit to tackling thecountry’s dilemmas collaboratively. (Business Day, 3 December 2008) (Other) conundrums included how to develop a professional, performance- based, civil service; how to create an inclusive society while redressing lingering historical imbalances; and how to deal with the “huge” unintended consequences of some of the government’s “very good” policies. These policies included black economic empowerment (BEE), and the mass dismissal of white professionals from the civil service, particularly the country’s engineers. (Business Day, 3 December 2008)BMI-BRSCU
  16. 16. COURAGEOUS LEADERSHIP www.strategicforum.co.zaKhoza, writing in Nedbanks latest annualreport . . . , said the countrys “strangebreed” of leadership needed to adhere to theinstitutions that underpinned democracy.The political climate was not a picture of anaccountable democracy, he said.“Our political leadership’s moral quotient isdegenerating and we are fast losing thechecks and balances that are necessary toprevent a recurrence of the past.”Khoza said South Africans had a duty to buildand develop the nation, but also to hold theirleaders accountable.“We have a duty to build and develop thisnation and to call to book the putativeleaders who, due to sheer incapacity, cannotdeal with the complexity of 21st centurygovernance and leadership, cannot lead,”said Khoza. (Busreo.co.za Newsletter, 6 April 2012) BMI-BRSCU
  17. 17. COURAGEOUS LEADERSHIP www.strategicforum.co.zaBusiness . . . challenged as wrong a suggestionby the ANC that business must leave politics topoliticians.“We disagree in the strongest possible termswith the idea that business leaders should notparticipate in our nation’s political discourse,”said director for Business Leadership of SouthAfrica Friede Dowe in a statement.“Businesses are corporate citizens. They andthe individuals who lead particular businesseshave not only a constitutional right of equalimportance but also a patriotic duty to join thedebate about a post transition South Africa.“To suggest that politics should be left topoliticians is just wrong.” (Busrep.co.za, 6 April2012) BMI-BRSCU
  18. 18. www.strategicforum.co.za “. . . the Board is there to understand the big picture, to understand the relationship of the business with the society, particularly with the environmental issues, particularly with the political issues, but to think in 30 year terms, not to think in three-year terms.” (Bobby Godsell in Gleason: 2011: 149) “I see myself as a person with vision in our industry about building things and innovating things and that is not a CEO function necessarily” (Adrian Gore in Gleason: 2011; 164)
  19. 19. www.strategicforum.co.za “A mission statement in a corporate sense is a definition of purpose: it circumscribes and defines what you do. In a personal sense a mission statement, as opposed to goals, is not what you want to have, it’s not even what you want to do, it’s who you want to be, and that takes some thinking.” (Mark Lamberti in Gleason: 2011: 149)
  20. 20. COURAGEOUS LEADERSHIP www.strategicforum.co.za Building: The Engine for Growth and Wealth Modeling Creation. Property a cooperative preferred investment behaviour REINVENTION Skills Training and INDUSTRY Development Government LabourLeadership, Enterprise Lobbying, Development, Advocacy BEE Management Cross Training and Productive functional Development capacity Networking Alliances, Joint Ventures The Hot Spot Scenario: mapping emergence (Based on Gratton: 2007: 145)
  21. 21. COURAGEOUS LEADERSHIP www.strategicforum.co.zaThe more peers we can bring online forthe business of saving the world, the Building: The Engine foreasier the effort will be, and in a Growth and Wealth Modelingsense, the stronger we will each be. Creation. Property a cooperative preferred investment(Ramo: 2009: 240)behaviour REINVENTION Skills Training and INDUSTRY Development Government Labour Leadership, Enterprise Lobbying, Development, Advocacy Research has indicated that we can create jobs in six priority BEE areas. These are infrastructure development, agriculture, mining and Management beneficiation, manufacturing, the green economy and Cross Training and tourism. Productive functional Development We cannot create these jobs alone. We have to work capacity Networking with business, labour and the community Alliances, Joint Ventures constituencies. (Pres Jacob Zuma: SONA: 2011) The Hot Spot Scenario: mapping emergence (Based on Gratton: 2007: 145)
  22. 22. DEVELOPING A NATIONAL VISION www.npconline.co.zaBased on extensive research, engagement and consultation, the National Planning commission (NPC) has identified nine challenges that constitute obstacles in meeting our objectives.The challenges are:1. Too few South Africans are employed;2. the quality of education for most black people remains poor;3. Poorly located, inadequate and poorly maintained infrastructure;4. Spatial challenges continue to marginalise the poor;5. South Africas growth path is highly resource-intensive and hence unsustainable;6. The ailing public health system confronts a massive disease burden;7. The performance of the public service is uneven;8. Corruption undermines state legitimacy and service delivery;9. South Africa remains a divided society. © BMI-BRSCU
  23. 23. DEVELOPING A NATIONAL VISION www.npconline.co.za1. A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life.2. People are united in diversity, recognising the common interest that binds us as a nation, and we have achieved greater equality for women in all aspects of life.3. High-quality education and health care, and adequate provision of housing, water, sanitation, energy and transport, give impetus to human development.4. Natural wealth is harnessed sustainably, in a way that protects our environment, using science and modern technology to ensure a growing economy that benefits all.5. People who are able to work have access to jobs, workers’ rights are protected and the workforce is skilled.6. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work.7. An efficient state protects citizens, provides quality services and infrastructure, and gives leadership to national development.8. Individuals and communities, at work and at play, embrace mutual respect and human solidarity.9. Government, business and civil society work to build a better Africa and a better world. © BMI-BRSCU
  24. 24. DEVELOPING A NATIONAL VISION www.npconline.co.za1. A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life.2. People are united in diversity, recognising the common interest that binds us as a nation, and we have achieved greater equality for women in all aspects of life.3. High-quality education and health care, and adequate provision of housing, water, sanitation, energy and transport, give impetus to human development.4. Natural wealth is harnessed sustainably, in a way that protects our environment, using science and modern technology to ensure a growing economy that benefits all.5. People who are able to work have access to jobs, workers’ rights are protected and the workforce is skilled.6. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work.7. An efficient state protects citizens, provides quality services and infrastructure, and gives leadership to national development.8. Individuals and communities, at work and at play, embrace mutual respect and human solidarity.9. Government, business and civil society work to build a better Africa and a better world. © BMI-BRSCU
  25. 25. DEVELOPING A NATIONAL VISION www.npconline.co.za1. A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life. The Vision must be a dream and must be made much2. People are united in diversity, recognising the common interest that binds us as a nation, and we have more compelling than what the NPC is trying to do in achieved greater equality for women in all aspects of life.3. High-quality education and health care, plan (perhaps it is rather a mission?). Why its 10 point and adequate provision of housing, water, sanitation, energy liketransport, givewe increase sustainable not something and “together impetus to human development.4. Natural wealth is harnessed sustainably, in a way that life of people” ? (Prof Stef welfare and quality of protects our environment, using science and Coetzee, Sakebeeld, 22 June 2011) modern technology to ensure a growing economy that benefits all.5. People who are able to work have access to jobs, workers’ rights are protected and the workforce is skilled.6. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work. This is a well considered document that deserves the7. An efficient state protectsattention of all thinking South and infrastructure, the gives citizens, provides quality services Africans. We need and leadership to national development. political will to implement this and the plan which8. Individuals and communities, at work and in play, embrace mutual respect and human solidarity. follows later at the year. (Prof Stef9. Coetzee, Sakebeeld, 22 June 2011) Government, business and civil society work to build a better Africa and a better world. © BMI-BRSCU
  26. 26. DEVELOPING A NATIONAL VISION www.npconline.co.za VISION A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life, build a better Africa and a better World. MISSSIONThis is achieved through:1. High-quality education and health care, and adequate provision of housing, water, sanitation, energy and transport, give impetus to human development.2. Natural wealth is harnessed sustainably, in a way that protects our environment, using science and modern technology to ensure a growing economy that benefits all.3. People who are able to work have access to jobs,4. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work.5. An efficient state protects citizens, provides quality services and infrastructure, and gives leadership to national development.6. Government, business and civil society work to build a better Africa and a better world. © BMI-BRSCU
  27. 27. DEVELOPING A NATIONAL VISION www.npconline.co.za VALUES1. People are united in diversity through Ubuntu;2. An efficient state protects citizens;3. Individuals and communities, at work and at play, embrace mutual respect and human solidarity;4. Equality for women in all aspects of life;5. Workers’ rights are protected, including access to decent work;6. The workforce is skilled;7. Promoting the common interests of the nation through Openness, transparency, collaboration and accountabilty. SLOGAN A democratic state, rooted in the values of the constitution © BMI-BRSCU
  28. 28. DEVELOPING A NATIONAL VISION www.npconline.co.zaThe NPC plays a role mobilising society around a vision and a development plan. It does this through active engagement with the public, ensuring that experts’ views are canvassed on its proposals, and through a wide range of interactions. The commission has to carry out its functions representing all South Africans, taking into account their views irrespective of political outlook.The NPC invites all South Africans to participate in this process to define a shared vision for our collective future.The Building Industry leadership needs to engage with the NPC in order to contribute to the development of the National Vision for the Country and for the Building Industry. © BMI-BRSCU
  29. 29. STRATEGIC RESPONSE OF THE BUILDING INDUSTRY www.strategicforum.co.za Summarised MBSA Summit Decisions  To investigate the establishment of a multi- representative Industry Forum that would meet 2 to 3 times per annum  To promote building as the Engine for Growth, nation building and wealth creation (through home ownership) by way of effective communication with leaders in all the economic sectors  To establish a Task Force to unpack the R846 billion infrastructure budgets and investment for all public sector work, including affordable housing; to determine the impediments to the delivery thereof; to ensure a constant work flow and uphold quality standards, measured against annually assessed programmes, and to explore and prioritise the effective implementation of national infrastructure maintenance strategies.  The formation of an inclusive forum to analyse the 8 000 projects within the Department of Human Settlements.  To maximise employment opportunities by correct retro- fitting of existing buildings; maximise reduction of carbon emissions, and pursue green best practice approaches for engineering services in line with” green building”. (February 2011) © BMI-BRSCU
  30. 30. STRATEGIC RESPONSE OF THE BUILDING INDUSTRY www.strategicforum.co.za Summarised MBSA Summit Decisions ?  To investigate the establishment of a multi- representative Industry Forum that would meet 2 to 3 times per annum  To promote building as the Engine for Growth, nation building and wealth creation (through home ownership) by way of effective communication with leaders in all theTowards developing a Co- economic sectorsoperative mindset and cross  To establish a Task Force to unpack the R846 billionboundary networking for the infrastructure budgets and investment for all public sectorIndustry? work, including affordable housing; to determine the impediments to the delivery thereof; to ensure a constant work flow and uphold quality standards, measured against annually assessed programmes, and to explore andFirst step towards developing a prioritise the effective implementation of nationalVision for the Industry? infrastructure maintenance strategies.  The formation of an inclusive forum to analyse the 8 000 projects within the Department of Human Settlements.Asking the right questions.Turning known unknowns into  To maximise employment opportunities by correct retro- fitting of existing buildings; maximise reduction of carbonknown knowns. emissions, and pursue green best practice approaches for engineering services in line with” green building”. (February 2011) © BMI-BRSCU
  31. 31. STRATEGIC RESPONSE www.strategicforum.co.za NATIONAL ISSUES INVESTMENT GROWTH EMPLOYMENT WEALTH PROPERTY ENVIRONMENTOverarching vision alignedwith National Issues and ORGANISATION’S ROLE TOMORROW’S ECONOMYVision, adapted and MARKETING LOGISTICS MANUFACTURINGcustomised by Industry and VISION MISSIONorganisations for their own The Building Industry is an The elimination of social engine for growth and backlogs and inequities isvision and values. wealth creation through achieved through the ENVIRONMENTAL redistribution, property provision of sustainable SUSTAINABILITY YESTERDAY’S development, ownership integrated developments, ECONOMY and investment. and providing skills, employment and BROAD FOCUS ON entrepreneurial CONTRIBUTION TO opportunities for growth. NATIONAL ISSUES BORROW SOCIAL BUY SUSTAINABILITY VALUES BURN The Industry has an igniting vision, a culture, or mind set of co-operation, collaboration and cross-boundary networking; REINVENTION and the productive capability to deliver SUSTAINABLE Doing well while doing Environmental, Social and Economic solutions and based on good. the unashamedly ethical values and code of conduct of: NARROW FOCUS • Ubuntu ECONOMIC ON COMPANY • Integrity SUSTAINABILITY • Respect • Accountability • Law abiding SLOGAN Building: An engine of growth & wealth creation © BMI-BRSCU
  32. 32. THE STRATEGIC FORUM www.strategicforum.co.za Studium Ad Prosperandum •• BUILDING RESEARCH BUILDING RESEARCH BMI BMI STRATEGY CONSULTING STRATEGY CONSULTING UNIT cc UNIT cc  Voluntas in Conveniendum Reg. No. 2002/105109/23 THE STRATEGIC FORUM A place of assembly for strategic conversations Towards Building: An Engine for growth and wealth creation in A democratic state, rooted in the values of the Constitution, working with allsectors of society to improve the quality of life, build a better Africa and a better World. Dr. Llewellyn B. Lewis April 2012 © © BMI-BRSCU BMI-BRSCU

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