Abstract
Large construction enterprises continue to restructure and downsize due to constant changes in
the economic demands in South Africa, Small, Medium and Micro Enterprises (SMMEs) in the
construction industry have come to play an increasingly imperative role in the industry and the
South Africa's economic development. Construction SMMEs considerably create a vast amount
of job opportunities due to their labour intensive nature and technologies used. However
Construction SMMEs are faced with barriers denying them from further development and
growth hence only a few survive and remain sustainable. Therefore this study investigates the
development of construction SMMEs in the Gauteng Province of South Africa. A literature
survey was carried out followed by primary data gathered through a structured questionnaire
which was developed for 120 SMME construction firms to establish their perceptions on the
development of SMMEs in the construction industry. Findings from the study indicate that
producing quality work, good cash flow management, good contractual understanding, having a
business plan, effective communication channel in the firm, maintaining good relationships with
clients, proper record keeping, sensible operating costs, recruiting qualified staff and availability
of effective marketing strategies were the main critical success factors required by SMMEs in
the Gauteng Province for their firms survival in the construction industry. The most
recommended solutions for the development of construction SMMEs in Gauteng Province of
South Africa were; education / skills / qualifications; attending leadership training courses;
availability of financial benefits, rewards and incentives; adapting practices of current larger
construction companies and learning new skills that will enhance capability. The study further
revealed that the critical factors contributing to the failure of construction SMMEs in Gauteng
Province of South Africa are; corruption; insolvency / credit problems; poor cash flow
management; accessing finance; lack of management skills; lack of general business skills; poor
time management; poor estimation practices ; poor record keeping and low profit margins due to
competition. This study contributes to the theory on the development of SMMEs as they are seen
as the key to the development of the local economy and the country at large. The findings
emanating from this study will form a basis for future research on construction SMMEs in South
Africa.
M.Tech. (Construction Management)