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Real estate and business services industry in South Africa
Date: 28 September 2018 Category: Economics |
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We take a look at a detailed report published by Statistics South Africa regarding the real estate, financial and business services industry. We take a look at income earned as well as profit margins of the various business types within this sector.
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Real estate and business services industry in South Africa
The table below shows the income earned by various activities in the real estate, financial intermediation and business services industry for both 2010 and 2016 as well as the relative contribution of each to the total income earned.
In 2010, real estate activities made up 18.3% of total income earned by this industry, while in 2016 it made up 21.8% of income earned by the sector. Computer and related services made up 9.6% of total income earned in 2010, while in 2016 it was sitting at 10.3% of the total income earned by the industry. In total the industry earned R709 billion in 2010, while in 2016 it came in at R1.189trillion. Up 67.63% from 2010 to 2016.
The activity within the real estate, financial intermediation and business services sector with the highest profit margin is that of real estate activities. No wonder there are so many real estate agents operating in South Africa. In 2010 the net profit margin was 26.6% for real estate activities, in 2016 this was sitting at 36.4%. The strong uptick in net profit margins in real estate activities shows the housing market in SA is a lot stronger in 2016 than it was in 2010.
The table below shows the number of employees of the various activities within the real estate, financial services and business services industry.
The table below shows the number of employees of the various activities within the real estate, financial services and business services industry.
The two biggest employers within this industry is the labour recruitment and provision of personnel (aka labour brokers) with it contributing 13.2% of total employment in the industry in 2016. Investigation and security activities made up 14.2% of total employment in the industry in 2016, with total employment of 239 275. Basically there are almost 240 000 security guards employed in South Africa to protect, businesses, properties, estates etc. And indication of just how serious the crime problem in South Africa is getting. Architectural, engineering activities and related technical consultancy employees jumped from 67 654 in 2010 to 83 496 in 2016. A strong increase with it jumping from making up 4.1% of total employment in the sector in 2010 to 5% in 2016.
The industry in total employed 1.683million people. Roughly 18% of total formal sector employment in South Africa. The image below shows the income earned (as % of total income) as well as the number of employees (as % of total number of employees).
The industry in total employed 1.683million people. Roughly 18% of total formal sector employment in South Africa. The image below shows the income earned (as % of total income) as well as the number of employees (as % of total number of employees).
The figure above shows that while real estate activities makes up 21.8% of income earned in the industry, it only makes up 6.9% of employees within this industry. Basically showing that real estate agents and firms are coining it. While at the opposite end of the spectrum, security guards and related activities which only made up 5.2% of income, yet contributes 14.2% of total employment. Only conclusion one can make from this is the fact that security guards are being exploited and paid peanuts. The same can be said about those working for labour placement agencies, with this part of the industry making up only 3.3% of income yet contributes 13.2% of total employment. No wonder there are calls to ban labour brokers in South Africa.