July – December 2013 Biannual Economic and Capacity Survey 1

Firm distribution based on Annual Turnover (based on responses received) Category by gross annual income % of firms 0 – R1,5m 5% R1,5m – R11,5m 42% > R11,5m 52% Total 100.0% Category by gross annual income % of firms 0 – R1,5m 10.3% R1,5m – R11,5m 55.9% > R11,5m 33.8% Total 100.0% July – December 2013January – June

Profile of respondents – by firm size Based on full and part time employment 3

Economic Impact Stable contribution of CESA Membership earnings as percentage of GDP Source: RBQN, CESA BECS, Industry Insight 4

Fee earnings vs Gross Fixed Capital Formation Rbn, real prices Source: RBQN, CESA BECS, Industry Insight 5

Infrastructure Allocations fall short of NDP target In order to achieve 10% target, need to double infrastructure allocations over the Medium Term Source: SARB Quarterly Bulletin, Budget Reviews

NDP specifies 30% target of GFCF to GDP Percentage of GDP NDP 2030 Target Projected to increase to 24% of GDP by 2016/17

Fee income, R billions Real 2000 prices Annualised | Deflator = CPI Source: CESA BECS 8

Real Fee income, Real prices Annual Change | Deflator = CPI Source: CESA BECS 9

CESA Confidence Index Source: CESA BECS 10

Business confidence vs CESA confidence Source: CESA BECS, BER 11

Real Fee income vs Industry confidence Income deflated using CPI Source: CESA BECS 12

CESA Labour Cost Indicator vs CPI Year on Year percentage change Source: CESA BECS 13

Employment vs REAL fee income (Rbn) (Deflated using the CPI & LCI) Source: CESA BECS CPI: Consumer price index LCI : Labour Cost Indicator 14

Employment vs Salary & Wage bill Source: CESA BECS 15

Discounting eased to an average of 24% Source: CESA BECS 16

Fee income earned by Sub-disciplines: % Share December 2013 Source: CESA BECS 17

Fee income earned by Sub-disciplines: % Share Change in market share in the last 12 months Source: CESA BECS 18

Fee income earned by TOP THREE disciplines: R bn Real 2000 prices Moving average (2 survey period): 2002 – 2013 Source: CESA BECS 19

Fee income earned by economic sector Percentage market share December 2012– December 2013 Source: CESA BECS 20

Profile of earnings by sector R22,2bn annualised current prices 21

Fee earnings by selected sector R billions, Real 2000 prices | Smoothed |2 survey average Source: CESA BECS 22

Fee income (Rm, Real prices) earned by key economic sectors June 2005 – December 2013 Source: CESA BECS 23

Provincial Market Share: December 2013 Vs change in market share from December 2012 GAIN market share GAIN market share Source: CESA BECS 24

Fee income earned by province (Rbn, real prices) High Capacity economies |TREND Annualised smoothed, average over 2 past surveys Source: CESA BECS 25

Fee income earned by province June 1999– June 2013| Rm real prices Source: CESA BECS 26

Fee income earned by province June 1999– June 2013| Rm real prices Source: CESA BECS 27

Provincial profile by economic sector where fee earnings >50% of total earnings Source: CESA BECS 28

Fee income earned (Real 2000 prices) High Capacity vs lower capacity provincial economies |Smoothed 84% of fees were earned in high capacity provinces Source: CESA BECS 29

Fee income earned : RSA vs EX-RSA R mill, Real 2000 prices | Annualised, smoothed 93% of fees were earned in South Africa Source: CESA BECS 30

Fee income earned by type of client Percentage share as at December 2013 Source: CESA BECS 31 Strong increase in contribution by central government

Fee income earned by type of client Percentage share Source: CESA BECS 32

Fee income earned by type of client R billion Real 2000 prices | Annualised, smoothed - avg over 2 survey periods Source: CESA BECS 33

Fee income earned by type of client R billions Real 2000 prices | Annualised, smoothed - average over 2 survey periods Source: CESA BECS 34

Competition in tendering Percentage of respondents that reported “Keen to Fierce” vs Fierce competition Source: CESA BECS 35

% of Firms wanting to increase staff Source: CESA BECS 36

Engineering Skills Shortfall Source: CESA BECS 37

Recruitment problems Source: CESA BECS 38

% of firms that reported experiencing problems recruiting the right people Source: CESA BECS 39

Bursaries Increased to 1.6 percentage of the Salary and Wage bill Source: CESA BECS Trend line – 2 year average 40

Bursaries The value of bursaries increased to an estimated R350m (current prices) R mill Real 2000 prices (Annualised) Source: CESA BECS 41

Training (Salaries and Direct Training Costs) Percentage of Payroll Data not available Source: CESA BECS Trend line – 2 year average 42

Training (Salaries and Direct Training Costs) Rbn, Real 2000 prices Data not available Source: CESA BECS Trend line – 2 year average 43

Training (Direct costs) Direct training costs as a percentage of payroll moderated to 0.6 percent Source: CESA BECS Trend line – 2 year average 44

Training (Direct costs) Rand millions, Real 2000 prices Source: CESA BECS Trend line – 2 year average 45

Industry Capacity Utilisation Of existing technical staff Source: CESA BECS 46

Summary of selected indicators by firm size category 47 Firm Size Category Capacity Utilisation of existing technical staff during the past 6 months % of Respondents that expect capacity utilisation of technical staff to increase over the next 6 months Average discount being offered by respondents in tendering situation to clients, benchmarked against the ECSA guideline fee scales % of Respondents that reported FIERCE Competition for work during the last six months Large Medium Small Micro Industry Average (Weighted) Source: CESA BECS

Total fee income outstanding for longer than 90 days increase in the last six months of 2013: Percentage of total fee income earned Source: CESA BECS Trend line – 2 year average 48

Escalation trends Year-on-Year Percentage Change CPI Basket Revised in January 2013 Forecasts based on latest Treasury estimates (Budget 2014/15 Source: Treasury estimates Budget

Labour unit cost indicator Slows to an increase of 7% in the last 6 months of 2013 Year-on-Year % Change (Smoothed) Source: CESA BECS 50

Labour unit cost indicator Annual Average Year-on-Year Percentage Change Source: CESA BECS 51

CESA labour costs outpace CPI 52

Typical Employment Breakdown July – December 2013 Source: CESA BECS 53

Overall Employment Breakdown, by race December 2007– June 2013 Source: CESA BECS 54

Employment profile Black only (excluding Asian / Coloureds) representation of total employment % Share of total employment Source: CESA BECS 55

Changing profile of female engineers 56

Executive Staff profile Source: CESA BECS 57

Executive Staff: % Share of total employment PTY, CC & Partnerships Source: CESA BECS 58

Black Executive Staff : (including Asian and Coloured) % Share of total Executive Staff Source: CESA BECS 59

African (Black) Executive Staff as % of total Executive | December 2008 – June 2013 Source: CESA BECS 60

Quality Management System Source: CESA BECS 61

ISO 9001:2008 Certificate Source: CESA BECS 62

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