Biannual Economic and Capacity Survey January June 2015

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Biannual Economic and Capacity Survey January – June 2015 1

Biannual Economic and Capacity Survey January – June 2015 1

Firm distribution based on Annual Turnover (based on responses received) July – December 2014

Firm distribution based on Annual Turnover (based on responses received) July – December 2014 January – June 2015 Full survey Category by gross annual income % of firms 0 – R 1, 5 m 2% R 1, 5 m – R 11, 5 m 38% > R 11, 5 m 60% Total 100. 0% Firm distribution based on turnover Category by gross annual income 0 – R 1, 5 m 10% R 1, 5 m – R 11, 5 m 51% > R 11, 5 m 39% Total 100. 0% Firm distribution based on turnover 0 -1. 5 10. 0% 0 -1. 5 2. 0% 1. 5 -11. 5 38. 0% >11. 5 60. 0% 0 -1. 5 Source: CESA BECS 1. 5 -11. 5 >11. 5 % of firms >11. 5 39. 0% 1. 5 -11. 5 51. 0% 0 -1. 5 -11. 5 >11. 5 2

Profile of respondents – by firm size Based on full and part time employment

Profile of respondents – by firm size Based on full and part time employment Large (>100) 10% Micro (< 10) 28% Medium (20 - 100) 34% Small (10 - 20) 27% Large (>100) Source: CESA BECS Medium (20 - 100) Small (10 - 20) Micro (< 10) 3

Fee earnings vs Gross Fixed Capital Formation (Res, Non-Res, Construction works) |Rbn, Constant 2005

Fee earnings vs Gross Fixed Capital Formation (Res, Non-Res, Construction works) |Rbn, Constant 2005 prices Source: RBQN, CESA BECS, Industry Insight 4

Consulting Engineering Earnings Percentage of GDP / GFCF construction Source: RBQN, CESA BECS, Industry

Consulting Engineering Earnings Percentage of GDP / GFCF construction Source: RBQN, CESA BECS, Industry Insight 5

Fee income, R billions Real 2000 prices Annualised | Deflator = CPI 12. 0

Fee income, R billions Real 2000 prices Annualised | Deflator = CPI 12. 0 10. 0 8. 0 6. 0 4. 0 2. 0 0. 0 Dec-96 Jun-98 Source: CESA BECS Dec-99 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Jun-13 Dec-14 6

Real Fee income, Real prices Annual Change | Deflator = CPI Y-Y Per. Change

Real Fee income, Real prices Annual Change | Deflator = CPI Y-Y Per. Change 4 per. Mov. Avg. (Y-Y Per. Change) 60. 0% 50. 5% 50. 0% 44. 9% 40. 3% 38. 2% 40. 0% 30. 0% 20. 0% 17. 3% 14. 1% 5. 7% 4. 9%5. 5%4. 6% 20. 1% 13. 7% 2. 0% 2. 1% 0. 5% 0. 0% -10. 0% -8. 4% -20. 0% 10. 3% 8. 7% 9. 5%8. 4% 7. 8%7. 9% 0. 4% -4. 3% -8. 4%-8. 0% -0. 7% -3. 6% -9. 8% -16. 9% -30. 0% JUN 00 JUN 01 JUN 02 JUN 03 JUN 04 JUN 05 JUN 06 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 Source: CESA BECS 7

CESA Confidence Index 4 per. Mov. Avg. (Index) 120 100 80 60 40 20

CESA Confidence Index 4 per. Mov. Avg. (Index) 120 100 80 60 40 20 0 Jun- Dec. Jun 00 -00 01 -01 02 -02 03 -03 04 -04 05 -05 06 -06 07 -07 08 -08 09 -09 10 -10 11 -11 12 -12 13 -13 14 -14 15 -15 16 Source: CESA BECS 8

CESA Labour Cost Indicator vs CPI Year on Year percentage change 30% 25% 20%

CESA Labour Cost Indicator vs CPI Year on Year percentage change 30% 25% 20% 15% LCI CPI 10% 4 per. Mov. Avg. (LCI) 5% 0% -5% Jun-98 Jan-00 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Jun-13 Dec-14 Source: CESA BECS 9

Employment vs REAL fee income (Rbn) (Deflated using the CPI & LCI) Employment Revised

Employment vs REAL fee income (Rbn) (Deflated using the CPI & LCI) Employment Revised (right axis) Income: CPI 2000 prices • CPI: Consumer price index • LCI : Labour Cost Indicator Income : CESA LCI 2005 prices 12. 0 30, 000 10. 0 25, 000 8. 0 20, 000 6. 0 15, 000 4. 0 10, 000 2. 0 5, 000 0. 0 0 De Jun De Jun De Jun De Jun De Jun c- -98 c- -99 c- -00 c- -01 c- -02 c- -03 c- -04 c- -05 c- -06 c- -07 c- -08 c- -09 c- -10 c- -11 c- -12 c- -13 c- -14 c- -15 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Source: CESA BECS 10

Salary and wage vs Employment Salary/Wage bill (Rbn, Real prices) Employment - right axis

Salary and wage vs Employment Salary/Wage bill (Rbn, Real prices) Employment - right axis 8. 0 30, 000 7. 0 25, 000 6. 0 20, 000 5. 0 4. 0 15, 000 3. 0 10, 000 2. 0 5, 000 1. 0 0 De Jun De Jun De Jun De Jun De Jun De c- -98 c- -99 c- -00 c- -01 c- -02 c- -03 c- -04 c- -05 c- -06 c- -07 c- -08 c- -09 c- -10 c- -11 c- -12 c- -13 c- -14 c 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Source: CESA BECS 11

Salary and wage bill | Percentage of gross fee earnings 70% 65% 60% 55%

Salary and wage bill | Percentage of gross fee earnings 70% 65% 60% 55% 50% 45% 40% 35% 30% De Jun De Jun De Jun De Jun De Jun De c- -98 c- -99 c- -00 c- -01 c- -02 c- -03 c- -04 c- -05 c- -06 c- -07 c- -08 c- -09 c- -10 c- -11 c- -12 c- -13 c- -14 c 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Source: CESA BECS 12

Average Discounting rate 30% BY FIRM CATEGORY 34 25% 20 25 25 20% 15%

Average Discounting rate 30% BY FIRM CATEGORY 34 25% 20 25 25 20% 15% 10% 5% A B Source: CESA BECS C D 0% JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 13

Fee income earned by Sub-disciplines: % Share 2 -year average 5 -year average Jun-15

Fee income earned by Sub-disciplines: % Share 2 -year average 5 -year average Jun-15 Town planning Structural Quantity Surveying Project Management Mining Mechanical Marine Information Systems / Technology Hydraulics GIS Industrial Process / Chemical Geotechnical Facilities Environmental Electrical / Electronic Civil Mechanical building Services Architecture Agricultural 0% Source: CESA BECS 10% 20% 30% 40% 50% 60% 14

Fee income earned by Sub-disciplines: % Share Change in market share in the last

Fee income earned by Sub-disciplines: % Share Change in market share in the last 6 months Town planning Structural Quantity Surveying Project Management Mining Mechanical Marine Information Systems / Technology Hydraulics GIS Industrial Process / Chemical Geotechnical Facilities Environmental Electrical / Electronic Civil Mechanical building Services Architecture Agricultural -6% Source: CESA BECS -4% -2% 0% 2% 4% 6% 8% 15

Fee income earned by TOP THREE disciplines: R bn Real 2000 prices Moving average

Fee income earned by TOP THREE disciplines: R bn Real 2000 prices Moving average (2 survey period): 2002 – June 2015 Structural Proj Mang Civil - right axis 2. 0 6. 0 1. 8 5. 0 1. 6 1. 4 4. 0 1. 2 1. 0 3. 0 0. 8 2. 0 0. 6 0. 4 1. 0 0. 2 0. 0 2002 Structural 0. 5 Proj Mang 0. 5 Civil - right axis 1. 9 Source: CESA BECS 2003 0. 5 0. 3 1. 7 2004 0. 6 0. 3 1. 9 2005 0. 6 0. 4 2. 0 2006 0. 8 0. 4 2007 1. 2 0. 5 3. 2 2008 1. 5 0. 7 5. 6 2009 1. 3 0. 8 4. 8 2010 1. 6 0. 8 3. 8 2011 1. 9 1. 3 3. 3 2012 1. 3 4. 5 2013 1. 3 0. 7 5. 4 2014 Jun-15 1. 4 1. 1 1. 0 0. 9 4. 6 5. 0 16 0. 0

Fee income earned by economic sector Percentage market share 2 -year average 5 -year

Fee income earned by economic sector Percentage market share 2 -year average 5 -year average Jun-15 Other Agriculture / Forestry / Fishing Commercial Housing Tourism/Leisure Health Education Mining / Quarrying Energy Transportation Water 0% Source: CESA BECS 5% 10% 15% 20% 25% 30% 35% 17

Profile of earnings by sector Agriculture / Forestry / Fishing 1% Other 11% Water

Profile of earnings by sector Agriculture / Forestry / Fishing 1% Other 11% Water (Full water cycle) 14% Commercial 22% Transportation (land, air, road, rail, ports) 28% Housing (residential inc. land) 9% Tourism/Leisure 1% Health 2% Education Energy (electricity, gas, 1% Mining / Quarrying hydro) 6% 5% 18

Fee earnings by selected sector R billions, Real 2000 prices | Smoothed |2 survey

Fee earnings by selected sector R billions, Real 2000 prices | Smoothed |2 survey average 4. 0 3. 5 3. 0 2. 5 2. 0 1. 5 1. 0 0. 5 0. 0 JUN 07 DEC 07 JUN 08 DEC 08 JUN 09 DEC 09 JUN 10 DEC 10 JUN 11 DEC 11 JUN 12 DEC 12 JUN 13 DEC 13 JUN 14 DEC 14 JUN 15 Water 1. 3 1. 5 1. 9 1. 6 1. 3 1. 2 1. 1 1. 4 1. 2 1. 3 1. 6 1. 7 1. 6 Transportation 1. 8 2. 0 2. 9 3. 6 3. 0 2. 8 3. 1 2. 5 2. 4 2. 8 2. 7 2. 8 2. 9 2. 8 Energy 0. 4 0. 3 0. 4 0. 5 0. 3 0. 2 0. 5 1. 1 1. 3 0. 9 1. 2 1. 0 0. 7 0. 6 Housing 0. 5 0. 7 0. 8 1. 1 1. 3 1. 0 0. 7 0. 6 0. 7 1. 1 0. 9 0. 6 1. 0 Commercial 1. 2 1. 7 1. 8 2. 1 2. 0 2. 2 1. 8 1. 6 1. 3 1. 6 2. 4 2. 5 Source: CESA BECS 19

Fee income (Rm annualised, Real prices) earned by key economic sectors Housing 1, 600

Fee income (Rm annualised, Real prices) earned by key economic sectors Housing 1, 600 1, 400 1, 200 1, 000 800 600 400 200 0 Water 2, 000 1, 800 1, 600 1, 400 1, 200 1, 000 800 600 400 200 0 Energy D Ju D Ju D Ju ecn-ecn-ecn-ecn-ecn- 0 - 0 - 1 - 1 0 6 0 7 0 8 0 9 0 0 1 1 1 2 1 3 1 4 1 5 5 6 7 8 9 0 1 2 3 4 Source: CESA BECS 4, 500 4, 000 3, 500 3, 000 2, 500 2, 000 1, 500 1, 000 500 0 DJDJDJDJDJ eueueueueu c- n c- n c- n 0 - 0 - 0 - 1 - 1 - 150607080910111213141 6 7 8 9 0 1 2 3 4 5 D Ju D Ju D Ju ecn-ecn-ecn-ecn-ecn- 0 - 0 - 1 - 1 0 6 0 7 0 8 0 9 0 0 1 1 1 2 1 3 1 4 1 5 5 6 7 8 9 0 1 2 3 4 1, 600 1, 400 1, 200 1, 000 800 600 400 200 0 Transportation DJDJDJDJDJ eueueueueu c- n c- n c- n 0 - 0 - 0 - 1 - 1 - 1 50607080910111213141 6 7 8 9 0 1 2 3 4 5 Health Commercial 3, 000 300 2, 500 250 2, 000 200 1, 500 150 1, 000 100 50 0 0 D Ju D Ju D Ju D Ju D Ju ec n- ec n- ec n- ec n- ec n- 06 - 07 - 08 - 09 - 10 - 11 - 12 - 13 - 14 - 15 05 06 07 08 09 10 11 12 13 14 20

Provincial Market Share Jun-15 40. 0 5 -year average 2 - year average 35.

Provincial Market Share Jun-15 40. 0 5 -year average 2 - year average 35. 0 % Share (bar) 30. 0 25. 0 20. 0 15. 0 10. 0 5. 0 Source: CESA BECS INT'L African KWA-NAT MPU GAUT N-PROV N-W FS N-CAPE W-CAPE E-CAPE 0. 0 21

Fee income earned by province (Rbn, real prices) High Capacity economies |TREND Annualised smoothed,

Fee income earned by province (Rbn, real prices) High Capacity economies |TREND Annualised smoothed, average over 2 past surveys Eastern Cape Western Cape Gauteng Kwazulu Natal 4. 5 4. 0 3. 5 3. 0 2. 5 2. 0 1. 5 1. 0 0. 5 Source: CESA BECS 22 Jun-15 Jun-14 Jun-13 Jun-12 Jun-11 Jun-10 Jun-09 Jun-08 Jun-07 Jun-06 Jun-05 Jun-04 Jun-03 Jun-02 Jun-01 Jun-00 0. 0

Fee income earned by province June 1999– December 2014| Rm real prices Eastern Cape

Fee income earned by province June 1999– December 2014| Rm real prices Eastern Cape 1, 000 900 800 700 600 500 400 300 200 100 0 Ju Ju Ju Ju Ju n- n- n- n- n 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Western Cape 2, 500 350 300 2, 000 250 1, 500 200 1, 000 150 100 50 0 Ju Ju Ju Ju Ju n- n- n- n- n 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Free State 450 400 350 300 250 200 150 100 50 0 Source: CESA BECS 0 Ju Ju Ju Ju Ju n- n- n- n- n 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 North West 450 400 350 300 250 200 150 100 50 0 Ju Ju Ju Ju Ju n- n- n- n- n 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Northern Cape Limpopo 350 300 250 200 150 100 50 0 Ju Ju Ju Ju Ju Ju Ju Ju Ju n- n- n- n- n- n- n- n- n 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 23

1, 800 1, 600 1, 400 1, 200 1, 000 800 600 400 200

1, 800 1, 600 1, 400 1, 200 1, 000 800 600 400 200 0 Source: CESA BECS 600 500 400 300 200 100 Africa 2, 000 1, 800 1, 600 1, 400 1, 200 1, 000 800 600 400 200 0 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 Jun-12 Jun-13 Jun-14 Jun-15 Mpumalanga International 1, 200 12, 000 10, 000 8, 000 6, 000 4, 000 2, 000 0 0 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 Jun-12 Jun-13 Jun-14 Jun-15 Gauteng 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 Jun-12 Jun-13 Jun-14 Jun-15 4, 500 4, 000 3, 500 3, 000 2, 500 2, 000 1, 500 1, 000 500 0 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 Jun-12 Jun-13 Jun-14 Jun-15 Fee income earned by province June 1999– June 2015| Rm real prices Kwazulu Natal Total Fee Earnings 24

Provincial profile by economic sector where fee earnings >50% of total earnings Western Cape

Provincial profile by economic sector where fee earnings >50% of total earnings Western Cape Gauteng Kwazulu Natal Eastern Cape Other Agriculture / Forestry / Fishing Commercial Housing (residential inc. land) Tourism/Leisure Health Education Mining / Quarrying Energy (electricity, gas, hydro) Transportation (land, air, road, rail, ports) Water (Full water cycle) 0% 10% 20% 30% 40% 50% 60% Source: CESA BECS 0% 20% 40% 0% 50% 0% 20% 40% 25

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

Fee income earned (Real 2000 prices) High Capacity vs lower capacity provincial economies |Smoothed Index Dec-98=100 Lower Capacity High Capacity 300. 00 • High Capacity: Gauteng, Western Cape, Eastern Cape, Kwazulu Natal • Low capacity: North West, Free State, Northern Cape, Limpopo, Mpumalanga 250. 00 200. 00 150. 00 100. 00 50. 00 81% of fees were earned in high capacity provinces 0. 00 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 Jun-12 Jun-13 Jun-14 Jun-15 Source: CESA BECS 26

Fee income earned : RSA vs EX-RSA R mill, Real 2000 prices | Annualised,

Fee income earned : RSA vs EX-RSA R mill, Real 2000 prices | Annualised, smoothed Ex-RSA - left axis RSA - right axis 3, 000 10, 000 76% of fees were earned in South Africa 2, 500 2, 000 9, 000 8, 000 7, 000 6, 000 1, 500 5, 000 4, 000 1, 000 500 3, 000 2, 000 1, 000 0 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 0 Source: CESA BECS 27

Fee income earned by type of client Percentage share as at June 2015 Central

Fee income earned by type of client Percentage share as at June 2015 Central 5% Provincial 13% Private 43% Local 25% Parastatals 14% Source: CESA BECS 28

Fee income earned by type of client Percentage share Jun-12 Dec-12 Jun-13 Dec-13 Jun-14

Fee income earned by type of client Percentage share Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 50. 0 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 10. 0 5. 0 0. 0 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Source: CESA BECS Central 8. 1 2. 8 5. 0 30. 1 5. 4 11. 4 4. 7 Provincial 14. 3 5. 3 10. 0 5. 1 13. 5 12. 6 13. 0 Local 22. 8 31. 2 21. 0 12. 0 27. 6 20. 9 25. 4 Parastatals 20. 5 15. 2 20. 0 15. 1 15. 8 16. 0 13. 8 Private 34. 3 45. 5 44. 0 37. 7 39. 1 43. 1 29

Fee income earned by type of client R billion Real 2000 prices | Annualised,

Fee income earned by type of client R billion Real 2000 prices | Annualised, smoothed - avg over 2 survey periods 5. 0 4. 5 4. 0 3. 5 Central 3. 0 Provincial Local Parastatals Private 2. 5 2. 0 1. 5 1. 0 0. 5 0. 0 Source: CESA BECS Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 30

Fee income earned by type of client R billions Real 2000 prices | Annualised,

Fee income earned by type of client R billions Real 2000 prices | Annualised, smoothed - average over 2 survey periods Public Private 8. 0 7. 0 6. 0 5. 0 4. 0 3. 0 2. 0 1. 0 0. 0 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Source: CESA BECS 31

Competition in tendering Percentage of respondents that reported “Fierce” competition 80% 70% 60% 50%

Competition in tendering Percentage of respondents that reported “Fierce” competition 80% 70% 60% 50% Fierce 40% 4 per. Mov. Avg. (Fierce) 30% 20% 10% 0% Jun-00 02 -Jun Source: CESA BECS 04 -Jun 06 -Jun 08 -Jun 10 -Jun Jun-12 Jun-14 32

% of Firms wanting to increase staff 100. 00 90. 00 80. 00 70.

% of Firms wanting to increase staff 100. 00 90. 00 80. 00 70. 00 60. 00 50. 00 40. 00 30. 00 20. 00 10. 00 Dec'11 Jun'12 Dec'12 Jun'13 Dec'13 Jun'14 Dec'14 Source: CESA BECS Eng 74. 00 86. 5 61. 2 50. 8 32. 0 86. 2 48. 0 O Tech 4. 80 17. 5 12. 5 20. 9 36. 0 3. 4 13. 0 Technologist 36. 00 38. 2 19. 9 46. 2 23. 0 26. 7 39. 0 Technicians 22. 00 22. 2 18. 1 30. 5 22. 0 12. 9 35. 0 Support staff 6. 90 6. 6 7. 5 24. 2 28. 0 2. 1 3. 8 33

% of Firms wanting to increase staff 100. 00 90. 00 80. 00 70.

% of Firms wanting to increase staff 100. 00 90. 00 80. 00 70. 00 60. 00 50. 00 40. 00 30. 00 20. 00 10. 00 Dec'11 Jun'12 Dec'12 Jun'13 Dec'13 Jun'14 Dec'14 Jun'14 Source: CESA BECS Eng 74. 00 86. 5 61. 2 50. 8 32. 0 86. 2 48. 0 69. 3 O Tech 4. 80 17. 5 12. 5 20. 9 36. 0 3. 4 13. 0 51. 1 Technologist 36. 00 38. 2 19. 9 46. 2 23. 0 26. 7 39. 0 68. 2 Technicians 22. 00 22. 2 18. 1 30. 5 22. 0 12. 9 35. 0 5. 2 Support staff 6. 90 6. 6 7. 5 24. 2 28. 0 2. 1 3. 8 2. 9 34

Engineering Skills Shortfall 100. 0 120. 0 90. 0 100. 0 80. 0 70.

Engineering Skills Shortfall 100. 0 120. 0 90. 0 100. 0 80. 0 70. 0 80. 0 60. 0 50. 0 60. 0 40. 0 30. 0 40. 0 20. 0 10. 0 % Wanting to increase engineers % of firms experiencing difficulties in recruiting (PDI) engineers Source: CESA BECS Jun-15 Jun-14 Jun-13 Jun-12 Jun-10 Jun-09 Jun-08 Jun-07 Jun-06 Jun-05 Jun-04 Jun-03 Jun-02 Jun-01 Jun-00 0. 0 Jun-15 % Wanting to increase engineers % of firms experiencing difficulties in recruiting (PDI) engineers 35

% of firms that reported experiencing problems recruiting the right people Male Female PDI

% of firms that reported experiencing problems recruiting the right people Male Female PDI Technicians PDI Technologist PDI Engineers Support Staff Other technical staff Technicians Technologist Engineers Engineer 0 Source: CESA BECS 20 40 60 80 100 0 20 40 60 80 100 36

Bursaries % of Salary / Wage bill 1. 8% 1. 6% Trend line –

Bursaries % of Salary / Wage bill 1. 8% 1. 6% Trend line – 2 year average 1. 4% 1. 2% 1. 0% 0. 8% 0. 6% 0. 4% 0. 2% 0. 0% Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Source: CESA BECS 37

Bursaries R mill Real 2000 prices (Annualised) 250 200 150 100 Trend line –

Bursaries R mill Real 2000 prices (Annualised) 250 200 150 100 Trend line – 2 year average 50 0 Rm Jun-01 Source: CESA BECS Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Jun-13 Dec-14 38

Training (Salaries and Direct Training Costs) Percentage of Salaries/Wages 40% 35% Trend line –

Training (Salaries and Direct Training Costs) Percentage of Salaries/Wages 40% 35% Trend line – 2 year average 30% 25% Data not available 15% 10% 5% Data not available 20% 0% Jun'05 Source: CESA BECS Jun'06 Jun'07 Jun'08 Jun'09 Jun-102 Jun-11 Jun-122 Jun-13 Jun-14 Jun-15 39

Training (Salaries and Direct Training Costs) Rbn, Real 2000 prices 4. 00 3. 50

Training (Salaries and Direct Training Costs) Rbn, Real 2000 prices 4. 00 3. 50 3. 00 Trend line – 2 year average 2. 50 1. 00 0. 50 Data not available 1. 50 Data not available 2. 00 Jun'09 Jun'10 0. 00 Jun'05 Source: CESA BECS Jun'06 Jun'07 Jun'08 Jun'11 Jun'12 Jun'13 Jun'14 Jun-15 40

Training (Direct costs) % of Salary/Wage bill 3. 5% 3. 0% Trend line –

Training (Direct costs) % of Salary/Wage bill 3. 5% 3. 0% Trend line – 2 year average 2. 5% 2. 0% 1. 5% 1. 0% 0. 5% 0. 0% Jun-98 Source: CESA BECS Dec-99 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Jun-13 Dec-14 41

Training (Direct costs) Rand millions, Real 2000 prices 250. 0 200. 0 150. 0

Training (Direct costs) Rand millions, Real 2000 prices 250. 0 200. 0 150. 0 100. 0 Trend line – 2 year average 50. 0 Jun-98 Source: CESA BECS Dec-99 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Jun-13 Dec-14 42

Industry Capacity Utilisation Of existing technical staff Average Utilisation Rate 80. 0 120% 60.

Industry Capacity Utilisation Of existing technical staff Average Utilisation Rate 80. 0 120% 60. 0 100% 40. 0 80% 20. 0 60% 0. 0 40% -20. 0 20% -40. 0 0% Jun-99 Source: CESA BECS Dec-00 Jun-02 Dec-03 Jun-05 Dec-06 Jun-08 Dec-09 Jun-11 Dec-12 Jun-14 43 Utilisation Net % Change of respondents expecting an increase in capacity utilisation

Total fee income outstanding for longer than 90 days Percentage of total fee income

Total fee income outstanding for longer than 90 days Percentage of total fee income earned 30 Excluding foreign clients Including foreign clients 25 20 Trend line – 2 year average 15 10 5 0 Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14 14 % 7. 9 11. 5 11. 7 6. 8 9. 5 7. 9 8. 4 15. 5 15. 6 14. 6 16. 6 15. 8 13. 3 12. 5 11. 2 10. 311. 2511. 0913. 7 9. 5 18. 5 23. 4 15. 5 18 24 9. 4 8. 3 9. 94 22 17. 4 24 Source: CESA BECS 44

Escalation trends: CPI Year-on-Year Percentage Change 14. 0 • CPI Basket Revised in January

Escalation trends: CPI Year-on-Year Percentage Change 14. 0 • CPI Basket Revised in January 2013 • Forecasts based on latest Treasury estimates (Budget 2015) 12. 0 10. 0 8. 0 6. 0 4. 0 2. 0 0. 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 % 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. 1 4. 3 5. 0 5. 7 6. 2 4. 4 5. 7 5. 9 Source: Treasury estimates Budget 2015 45

Jun-98 -1. 90% Dec-99 Source: CESA BECS 01 -Jun 02 -Dec 04 -Jun 05

Jun-98 -1. 90% Dec-99 Source: CESA BECS 01 -Jun 02 -Dec 04 -Jun 05 -Dec 07 -Jun 08 -Dec 10 -Jun 11 -Dec 0. 20% 1. 50% Jun-13 11. 30% 9. 30% 7. 00% 8. 50% 10. 70% 10. 20% 9. 10% 10. 60% 9. 50% 7. 80% 5. 60% 4. 40% 4. 30% 8. 00% 7. 20% 5. 30% 4. 30% 2. 90% 3. 70% 9. 20% 11. 40% 14. 30% 17. 60% 25. 50% 24. 00% 21. 50% 21. 80% 22. 50% 20. 60% 17. 80% 15. 00% 15. 20% Labour unit cost indicator Year-on-Year % Change (Smoothed) Dec-14 46

Labour unit cost indicator Annual Average Year-on-Year Percentage Change 25% 22. 20% 21. 67%

Labour unit cost indicator Annual Average Year-on-Year Percentage Change 25% 22. 20% 21. 67% 20% 16. 30% 15. 64% 15. 60% 15% 10. 90% 10. 00% 9. 40% 9. 30% 9. 65% 6. 30% 6. 05% 5. 40% 5% 5. 00% 4. 80% 3. 70% 0% 1999 2000 Source: CESA BECS 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 47

CESA labour costs outpace CPI Source: CESA BECS, Statistics South Africa 48

CESA labour costs outpace CPI Source: CESA BECS, Statistics South Africa 48

Profile by Race Black 31% White 53% Coloured 8% Asian 7% Source: CESA BECS

Profile by Race Black 31% White 53% Coloured 8% Asian 7% Source: CESA BECS 49

Profile of Professional Engineers by Race Black 8% Coloured 3% Asian 5% White 84%

Profile of Professional Engineers by Race Black 8% Coloured 3% Asian 5% White 84% Source: CESA BECS 50

Typical Employment Breakdown January – June 2015 Total Administration / Support staff Laboratory /

Typical Employment Breakdown January – June 2015 Total Administration / Support staff Laboratory / Survey Assistants Draughtspersons Technical Assistants Unregistered technical staff: Other Unregistered technical staff: Technician Unregistered technical staff: Technologist Unregistered technical staff: Engineer Technicians Pr. Techni Technologists Pr TEch. ENg Professional Other Professional Quantity Surveyors Professional Architects Professional Engineer Pr. Eng 0% 20% 40% Black Coloured 60% Asian 80% 100% White Source: CESA BECS 51

Overall Employment Breakdown, by race December 2007– December 2014 Black Asian Coloured White January

Overall Employment Breakdown, by race December 2007– December 2014 Black Asian Coloured White January – June 2015 Jun-15 Dec-14 Jun-14 Dec-13 Jun-13 Dec-12 12 -Jun 11 -Dec 11 -Jun 10 -Dec 10 -Jun 09 -Dec 09 -Jun 08 -Dec 08 -Jun 07 -Dec 60. 0% 53. 3% 50. 0% 46. 7% 40. 0% 31. 5% 30. 0% 20. 0% 10. 0% 8. 1% 7. 1% 0. 0% 0% 20% 40% 60% 80% 100% Black Coloured Asian White Source: CESA BECS 52

Source: CESA BECS Jun-15 Dec-14 Jun-14 Dec-13 Jun-13 Dec-12 12 -Jun 11 -Dec 11

Source: CESA BECS Jun-15 Dec-14 Jun-14 Dec-13 Jun-13 Dec-12 12 -Jun 11 -Dec 11 -Jun 10 -Dec 10 -Jun 09 -Dec 09 -Jun 08 -Dec 08 -Jun 07 -Dec 07 -Jun 06 -Dec 06 -Jun 05 -Dec 05 -Jun 04 -Dec 04 -Jun 03 -Dec 03 -Jun 02 -Dec 02 -Jun 01 -Dec 01 -Jun Dec-00 Jun-00 Dec-99 Employment profile Black only (excluding Asian / Coloured) representation of total employment % Share of total employment 35. 00% 30. 00% 25. 00% 20. 00% 15. 00% 10. 00% 5. 00% 0. 00% 53

Changing profile of female engineers Source: CESA BECS 54

Changing profile of female engineers Source: CESA BECS 54

Executive Staff: % Share of total employment PTY, CC & Partnerships 12. 00% 10.

Executive Staff: % Share of total employment PTY, CC & Partnerships 12. 00% 10. 00% June 2014: Shift in respondent profile Trend Line 8. 00% 6. 00% 4. 00% 2. 00% 0. 00% JUN 06 Source: CESA BECS JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 55

Black Executive Staff : (including Asian and Coloured) % Share of total Executive Staff

Black Executive Staff : (including Asian and Coloured) % Share of total Executive Staff Black executive as % of total executive Black executive as % of total employment - right axis 45% 3% 40% 2% 35% 30% 2% 25% 20% 1% 15% 10% 1% 5% 0% 0% JUN 06 Source: CESA BECS JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 56

Black (including Asian and Coloured) Executive Staff as % of total Executive | December

Black (including Asian and Coloured) Executive Staff as % of total Executive | December 2008 – June 2015 100. 0% 90. 0% 80. 0% 70. 0% 60. 0% 50. 0% 40. 0% 30. 0% 20. 0% 10. 0% 39783 40148 40513 40878 41244 41609 41791 41974 42156 Source: CESA BECS Pty_exec 13. 5% 19. 6% 15. 2% 20. 8% 22. 6% 29. 8% 29. 2% 27. 3% 28. 4% Pty_nonexec 81. 5% 88. 9% 35. 9% 85. 7% 75. 0% 58. 0% 82. 0% 55. 0% 64. 0% Member of CC 36. 8% 51. 8% 45. 5% 36. 5% 62. 0% 65. 0% 66. 7% 78. 2% 70. 0% Partner 0. 0% 12. 5% 14. 3% 11. 1% 25. 0% 30. 0% 54. 6% 46. 7% 57

Quality Management System 120% 100% 80% 60% 40% 20% 0% 41061 41244 41426 41609

Quality Management System 120% 100% 80% 60% 40% 20% 0% 41061 41244 41426 41609 41791 41974 42156 Large 95% 100% 100% Medium 93% 93% 91% 100% 98% Small 92% 100% 100% 97% Micro 84% 82% 83% 86% 88% 90% 84% Total 91% 93% 94% 96% 98% 94% Source: CESA BECS 58

ISO 9001: 2008 Certificate 120% 100% 80% 60% 40% 20% 0% 40148 40513 40695

ISO 9001: 2008 Certificate 120% 100% 80% 60% 40% 20% 0% 40148 40513 40695 40878 41061 41244 41426 41609 41791 41974 42156 Source: CESA BECS Large 91% 92% 54% 85% 89% 87% 89% 85% 86% 90% 100% Medium 42% 25% 56% 38% 39% 40% 38% 39% 55% 53% 48% Small 14% 0% 57% 29% 35% 20% 18% 21% 36% 9% 13% Micro 17% 20% 13% 9% 5% 6% 0% 7% 6% 20% 6% Total 45% 48% 35% 41% 38% 33% 32% 40% 43% 32% 59

Thank you www. cesa. co. za Tel: 011 463 2022 60

Thank you www. cesa. co. za Tel: 011 463 2022 60