REPORT: COVID-19 IMPACT ON IOPSA MEMBERSHIP.

05 Jul 2021 3:38 PM | Anonymous

05 July 2021

REPORT: COVID-19 IMPACT ON IOPSA MEMBERSHIP.

COVID-19 arrived in South Africa in March 2020 to devastating effect. We are currently experiencing the 3rd wave which is once again impacting the country severely. SA has been in various stages of lockdown for nearly 16 months now and the impact on businesses has been severe. The plumbing industry has not been immune, but the impacts have been mixed. Plumbing businesses which operate in the construction/new build industry were extremely hard hit by hard lockdown, since then there has been a slow but steady recovery, it will take some time before these businesses get back to pre-COVID levels, but there is movement. Plumbers who focused mainly on commercial and industrial maintenance have arguably faired the worst, business closures, work-from-home and lockdowns have seen their business dwindle. It remains to be seen what the long-term impacts will be but for now these businesses are struggling to survive. Conversely plumbing businesses which focus on domestic maintenance and renovations have been doing quite well, this is largely due to two factors, firstly more people are working from home and wanting to renovate or upgrade their homes, secondly with more people at home for longer periods, plumbing equipment tends to get used more often which leads to higher maintenance. Essentially a lot of the commercial/industrial maintenance market has shifted to the domestic market due to people working from home.

On average IOPSA membership has grown by around 10% per year for the past 7 years, however over the last 3 years membership has grown by 12-14%. This year looks set to be even better. This is not necessarily an indicator of market growth but more, we believe, due to renewed confidence in the services that IOPSA offers its members. Whilst cancellations have been relatively low, around 5% for the years leading up to 2020, we have seen an increase to around 7% since March 2020. Since March 2020, IOPSA has been carefully monitoring the reasons for cancellations of memberships to gauge the impact of COVID-19 on the industry. The below graph illustrates the reasons given by members for cancellations from March 2020 to June 2021.


COVID                           Financial difficulties due to COVID-19    

Closed                           Business closure – no reason given.

Unpaid                         unpaid fees – no reasons given.

Unwanted                   No longer want to be IOPSA members.

Restructure                Cancellation due to business restructure/no longer do plumbing work.

Liquidation                 Business currently in liquidation

Emigrate                      Business owner emigrated.

Retire                            Business owner retired.

Sold                               Business sold

PIRB                               1 member cancelled due to IOPSA’s association with PIRB.

Deceased                     Business owner deceased.


Prior to 2019 IOPSA did not capture data on reasons for cancellations therefore accurate comparisons against previous years is difficult. However, anecdotal evidence suggests that in the period 2017-2019 the main reasons for cancellations were;

  • 1.      Unpaid fees
  • 2.      Emigration
  • 3.      No longer want to be members.
  • 4.      Business closure
  • 5.      Retirement

A full quarter of cancellations were directly attributable to financial difficulties experienced due to COVID-19, many of these members have indicated that they would like to continue as IOPSA members if their financial position improves. It is also reasonable to assume that many of the businesses that closed without providing reasons or went into liquidation may very well have been due to the effects of COVID-19. IOPSA staff have also reported that several older members decided to bring their retirement dates forward due to the health risks posed by COVID-19. Of interest, is the reduction in emigrations. South African plumbers are still in demand internationally but due to travel restrictions emigration has been difficult. From these statistics there is little doubt that COVID-19 has had a significant impact on plumbing businesses. The extent to which it has and is affecting current members will be assessed in the annual industry survey in August 2021.  

The below graph indicates cancellations by region. The graph closely tracks IOPSA’s membership per region, with one exception. The Western Cape makes up roughly 13% of IOPSA’s total membership, however this region only accounted for 7% of cancellations since March 2020. This was arguably the most surprising finding from the report since IOPSA has faced some stiff opposition in the province. We are not sure if the reason for this anomaly is due to plumbers in the Western Cape weathering the COVID-19 storm better than other provinces or for some other reason, but it makes for an interesting anomaly. We are currently trying to source other data sets to compare this to and hope to find more answers during the upcoming annual industry survey.


As the 3rd wave reaches its peak we are once again receiving more reports from members who are finding trading conditions increasingly challenging especially in the new build and commercial/industrial maintenance markets. Many of these businesses are now pivoting into domestic maintenance, the effects of this change are yet to be seen but it will likely create stiff competition for those already in the domestic market. Whilst plumbing, being an essential service, is certainly more resilient than many other sectors, the impacts are definitely being felt. There is a distinct lack of larger construction projects and government tenders, releasing projects that are currently on hold would go a long way in stimulating the sector and creating much needed employment opportunities.

IOPSA would like to remind its members and everyone in the plumbing industry to wear masks at all times, regularly wash or sanitise hands and practice social distancing. We encourage everyone who is eligible to receive the vaccine to do so as soon as possible. Together we can overcome this pandemic.

Should you have any queries on this or any other matters, please do not hesitate to contact us on 011 454 0025.


ASSOCIATIONS

            

Copyright IOPSA 2020 - E&OE

Website Disclaimer                                              Email Disclaimer 

CONTACT US

Address: Suite 1, Dowerglen Plaza, 73 Sycamore Drive, Dowerglen, Edenvale

Phone: 08610 Plumb(75862)

+27 11 454 0025

Email: info@iopsa.org

michelle@iopsa.org
Powered by Wild Apricot Membership Software