Feb 29, 2012
Despite good indicators, Manufacturing Circle still concerned about 2012 prospectsBack
Aspen Pharmacare|Industrial|South Africans|Manufacturing|Manufacturing Output|Manufacturing Sales|Pharmaceuticals|Products|Services|Steel|Stavros Nicolaou|Stewart Jennings
© Reuse this
Chairperson Stewart Jennings said the prospect for disruptive industrial action was lower than it was in 2011, owing to multiyear wage settlements. But export demand had come under pressure as a result of the recessionary conditions in key European markets, while the resurgent rand would increase the threat of import competition. The South African unit has recovered strongly and was trading at better than R7.50 to the US dollar on Wednesday.
Domestic manufacturers had, thus, become heavily reliant on a continued recovery in domestic demand, which improved markedly in the last quarter of 2011 when compared with the prior quarter of the same year.
The recovery was reflected in the Manufacturing Circle’s latest bulletin, which was compiled by Pan-African Research and Investment Services, based on survey responses from 48 CEOs heading enterprises covering a range of industrial sectors from steel and glass to pharmaceuticals and with revenues of between R300-million and R10-billion.
The proportion of respondents reporting growth in the value of domestic sales increased from about 75% in the third quarter to nearly 92% in the final quarter of 2011. Similarly, about 87% of the respondents realised positive growth in the volume of domestic manufacturing sales in the final quarter of the year.
Most CEOs were also more bullish about the outlook, with the proportion of respondents who felt that business confidence was ‘modest to good’ more than doubling, from 14.6% to 31.3%, in the fourth quarter of 2011.
But Jennings pointed out the sector had slumped materially from a buoyant first quarter and he was worried that a similar pattern could be repeated in 2012, unless action was taken to buoy domestic demand.
The Manufacturing Circle had appointed Stavros Nicolaou, a senior executive at Aspen Pharmacare, to work with government to help ensure that the localisation benefits promised in the revised regulations associated with the Preferential Procurement Policy Framework Act were actually delivered.
“We had a meeting with Trade and Industry [on Tuesday] where we made an appeal for South African and the retail sector to buy South Africans goods,” Jennings said, indicating that the organisation would also be seeking to liaise with the retail sector in a bid to gain its support for South African-made products.
“I’m concerned about this year . . . I don’t think we are out of the woods at all in terms of manufacturing. I think it’s going to be a tough, tough 12 months ahead.”
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...