http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.14Change: -0.15
R/$ = 12.05Change: -0.20
Au 1200.03 $/ozChange: -6.12
Pt 1139.50 $/ozChange: -16.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
Article   Comments   Other News   Research   Magazine  
 
 
May 25, 2012

Uphill battle

Back
Africa|Industrial|Resources|Sustainable|Africa|Europe|Malaysia|South Africa|South Korea|Thailand|Gross Domestic Product|Manufacturing|Manufacturing Businesses|Manufacturing Output|Manufacturing Sector|Infrastructure|Rob Davies
Africa|Industrial|Resources|Sustainable|Africa|||Manufacturing||Infrastructure|
africa-company|industrial|resources|sustainable|africa|europe|malaysia|south-africa|south-korea|thailand|gross-domestic-product|manufacturing|manufacturing-businesses|manufacturing-output|manufacturing-sector|infrastructure|rob-davies
© Reuse this



As if one were needed, South Africans were given another reminder recently about the poor state of health of its manufacturing sector.

Despite warnings that the output improvements of January and February might not be sustainable, it nevertheless came as something of a shock to learn that manufacturing output fell by 4.3% month-on-month in March, and by 2.7% year-on-year.

The performance represented a sharp deterioration from the 4% year-on-year growth reported in February and was also well below market expectations of 3.3% growth.

Moreover, the output decline was broad based and also came against the backdrop of forward-looking indicators suggesting that the feeble March performance was likely to continue into April and possibly for much of the rest of the year.

Weak demand from Europe and slower growth in some emerging markets are likely to undermine export sales, while domestic demand is unlikely to shoot out the lights, particularly in the current gap period between government’s infrastructure promises and actual delivery.

In many ways, South Africa’s manufacturing sector is not a million miles away from where it was prior to the 2009 recession, which saw manufacturing businesses shed about 200 000 jobs.

Sadly, the current weakness is also part of a chronic problem, as Trade and Industry Minister Dr Rob Davies pointed out again last week, when unveiling a much-needed new nonsector-specific incentive for manufacturers.

The contribution of manufacturing to the total output of the South African economy has been falling since the mid-1970s. In 2011, the sector contributed 14.6% of gross domestic product (GDP), well down from its 21% GDP contribution in 1977.

In an effort to reinforce the importance of manufacturing to South Africa’s future employment and growth prospect, Davies also offered a sobering comparison between the performances of South African manufacturers and those in fast-growing Asian economies.

“In 1977, manufacturing made up 23.65 % of output in South Korea and, by 2010, this figure had grown to 30.6%,” he noted. In Malaysia manufacturing output made up 19% of output in 1977 but had risen to 26.1% by 2010. Similarly, in Thailand, the figure was 20% in 1977 but, in 2010, it stood at 35.6%.

Davies argued further that “no developing country has prospered in the last three decades with an industrial sector that has shrunk as much as ours”.

Few would disagree. However, despite the much-needed attention now being given to reviving the sector, along with some resources, the jury remains out on whether enough is truly being done to reverse the fortunes of manufacturing. Unless this deindustrialisation trend is reversed, South Africa’s growth and employment prospects will be under pressure.

Edited by: Terence Creamer
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Editorial Insight News
One of the main reasons given for the recent suspension of Eskom CEO Tshediso Matona and three other senior executives related to a “lack of credible information” surrounding the poor performance of the existing coal-fired power plants. In response, the Eskom board...
In a recent speech delivered at the University of Cape Town, International Monetary Fund (IMF) first deputy MD David Lipton noted that several institutions, including the IMF, had downgraded South Africa’s “potential growth” from around 3.5% to 4% previously to...
There is a definite move by the Gauteng provincial administration, led by Premier David Makhura, to more fully integrate the capital, ingenuity and skill of the private sector into its programme to “transform, modernise and re-industrialise” the country’s smallest,...
Article contains comments
Article contains comments
More
 
 
Latest News
South Africa's only nuclear plant, Koeberg
The Department of Energy (DoE) announced on Tuesday that the pre-procurement phase for South Africa’s proposed roll-out of a nuclear new build programme had been completed, following the latest in a series of workshops with vendor countries and their companies....
The Competition Commission has appointed Bukhosibakhe Majenge legal services divisional manager, effective April 1. The commission advised on Tuesday that Majenge would take over from Wendy Ndlovu, appointed manager in the office of the Commissioner. Majenge had...
Aim-listed energy provider Ncondezi Energy has been granted an extension for meeting certain conditions relating to the conditional commercial deal signed between it and Electricidade de Moçambique (EdM) for its 300 MW power plant. Ncondezi was establishing an...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
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.
 
 
 
 
 
This Week's Magazine
Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
After several years of navigating project-threatening red tape and currency fluctuations, the 4.4 MW Bronkhorstspruit biogas power plant, which will supply clean energy to a leading automotive manufacturer in Gauteng, is expected to enter production before June....
RESOURCEFUL The raw material for the pilot plant would be supplied from the dissolving wood pulp plants at Sappi’s Saiccor and Ngodwana mills, in South Africa, and the Cloquet mill, in the US
South African paper and pulp producer Sappi reported earlier this month that it would build a pilot plant for the production of low-cost Cellulose NanoFibrils, or CNF (nanocellulose) at the Brightlands Chemelot Campus in Sittard-Geleen in the Netherlands.
The long-term outlook for Nigeria is a country that has the potential to be very strong. So affirmed International Monetary Fund (IMF) Nigeria Mission Chief and Senior Resident Representative Dr Gene Leon on recently. "But we are starting from a point of huge...
Poor infrastructure planning and inadequate maintenance are becoming increasingly problematic for new developments and the associated infrastructure required to support such developments. In many urban and rural municipalities, the state of infrastructure has been...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96