By Nosiyabonga Mgudlwa Mongane, Chief Quantity Surveyor
The construction industry is a critical contributor to South Africa’s economic growth and development. It plays an important role in infrastructure delivery, job creation, and the development of the built environment. However, the sector is particularly sensitive to broader economic conditions, with changes in government spending, investment patterns, and global developments having a direct impact on construction activity.
As we look towards 2027, the industry is likely to experience both opportunities and challenges. Emerging trends will require construction companies, developers, investors, and built-environment professionals to adapt to an evolving operating environment. Some of the key trends expected to shape the sector are discussed below.
Public-sector infrastructure spending
Public-sector infrastructure spending over the 2026 Medium-Term Expenditure Framework (MTEF) period is estimated at R1.07 trillion. State-owned companies remain the largest contributors to capital investment, with projected expenditure of R445.5 billion over the next three years. Provinces are expected to spend R217.8 billion on infrastructure over the same period, while municipalities are projected to spend R205.7 billion.
Transport and logistics account for the largest share of infrastructure spending over the next three years, followed by energy, water and sanitation, and social infrastructure, including health and education.
This level of investment presents significant opportunities for the construction sector. The objective of infrastructure spending is not only to improve public services but also to stimulate economic growth, create employment, and deliver long-term socio-economic benefits. Increased investment in roads, bridges, public buildings, and other essential infrastructure has the potential to stimulate construction activity and support economic development.
However, the success of this investment will ultimately depend on the government’s ability to translate budget allocations into actual infrastructure delivery. Efficient project preparation, procurement, contract management, and project execution will be critical to ensuring that allocated funds translate into tangible benefits for communities and the economy.
Renewable energy expansion
Load shedding fundamentally changed South Africa’s construction market and the way clients approach the design and development of buildings. Energy resilience has become an important consideration, with growing demand for solar-powered buildings, battery storage, backup power systems, energy-efficient designs and smart electrical installations.
South Africa continues to make strides towards diversifying its energy mix, with the government setting ambitious targets for renewable energy to contribute 41% of electricity generation by 2030. The expansion of large-scale solar and wind energy projects is expected to create further opportunities within the construction sector while contributing to greater energy security.
Beyond large-scale renewable energy projects, the shift towards alternative energy solutions is also influencing the commercial and residential property markets. Developers and property owners are increasingly recognising the importance of incorporating energy resilience into building design and infrastructure planning.
However, achieving these ambitions will require more than investment in renewable energy projects. Efficient project execution, streamlined regulatory processes, and sustained investor confidence will be essential to unlocking the sector’s full potential.
Sustainable construction
Sustainability is no longer a secondary consideration in the construction industry. It is increasingly becoming an integral part of how buildings are designed, developed, and operated. Rising energy costs, growing environmental concerns, and evolving regulatory requirements have heightened the need for more resource-efficient buildings.
This shift is creating opportunities for innovative designs, construction methods, and products that reduce energy consumption and minimise environmental impact. The adoption of green building technologies and environmentally responsible construction practices not only addresses sustainability concerns but also offers economic benefits, including lower operational costs and enhanced property values.
From improved energy efficiency to green building certification, sustainability considerations are increasingly influencing investment and development decisions. Developers are placing greater emphasis on resource efficiency, reducing operational costs for tenants, and minimising the environmental footprint of their properties, while ensuring that buildings remain functional and aesthetically appealing.
Clients are also becoming more conscious of the long-term costs associated with owning and occupying buildings. Consequently, there is growing demand for buildings that reduce electricity consumption, optimise water usage, and minimise maintenance requirements.
This signals an important shift in the industry. The focus is gradually moving beyond the initial construction cost towards the overall lifecycle cost of buildings. Commercial developers are increasingly recognising that the long-term operational performance of a building is just as important as the initial capital investment.
Skilled labour shortages
The shortage of specialised skills remains a pressing concern within the construction sector. While South Africa does not necessarily face a general labour shortage, the demand for technical expertise and specialised skills continues to grow.
The sector’s ability to deliver the country’s ambitious infrastructure programme will depend largely on the availability of a skilled and competent workforce. Although construction activity presents opportunities for job creation, the growing skills gap could undermine the country’s infrastructure ambitions if sufficient investment is not made in developing young talent.
There is therefore a need for greater emphasis on skills development, workplace experience, professional mentorship, and knowledge transfer. These interventions are essential to ensuring that the industry develops a sustainable pipeline of skilled professionals capable of responding to the demands of future infrastructure projects.
At the same time, attracting and retaining experienced professionals remains a challenge. As the demand for specialised skills increases, the industry will need to be more intentional about creating opportunities for young professionals, strengthening professional development pathways, and retaining institutional knowledge.
Ultimately, investing in human capital is just as important as investing in physical infrastructure. Without the necessary skills and expertise, the construction sector will struggle to translate investment ambitions into successful and sustainable infrastructure delivery.
