FACTORS INFLUENCING THE CONTRIBUTION OF SME CONSTRUCTION FIRMS TO THE ECONOMIC GROWTH: EVIDENCE FROM EASTERN CAPE

The purpose of this study was to identify factors influencing the contribution of construction sector SMEs to economic growth in the Eastern Cape province, South Africa. The study adopted mixed methods approach. Data was collected from construction SMEs’ business owners/managers in the Eastern Cape. The sample consisted of 303 respondents for quantitative phase and 12 participants for qualitative phase. The study revealed factors influencing the contribution of SME construction firms to the economic growth. These factors were divided into internal and external factors. Internal factors included, education and training, business managerial skills, entrepreneurial leadership, shortage of skills. External factors identified included lack of government support, high prices of required materials, financial barriers, access to market, delays in payments, networking resources, competition in construction sector. It is recommended that construction SMEs need to develop their management skills through formal business training and development that will enhance skills as a catalyst for business growth and development. Furthermore, construction SMEs and large entities need to collaborate to develop business incubation programmes that will entrench skills sharing. Government needs to support construction SMEs through business funding and eliminate regulatory factors impacting the contribution of these firms. As contributions to the improvement of the contemporary field of management, the study aimed at positioning South African construction SMEs as a beacon of hope in creating employment and facilitating economic transformation and development by contributing fully to the country’s economic growth.