http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.69Change: -0.05
R/$ = 12.32Change: -0.01
Au 1168.78 $/ozChange: -0.02
Pt 1083.00 $/ozChange: 1.00
 
 
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|Export|Health|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|Export|Health|Industrial|Resources|Sustainable|Africa|||Manufacturing||Infrastructure|
africa-company|export|health|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
Creamer Media Editor
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Editorial Insight News
IDC research and information head Jorge Maia
Foreign direct investment (FDI) flows to South Africa fell by over 31% last year to $5.72-billion, from $8.3-billion in 2013, the latest World Investment Report (WIR 2015) shows. The decline in what is known to be a volatile number, drawn from South African Reserve...
The new operating philosophy outlined by acting Eskom CEO Brian Molefe sounds very much like the much maligned ‘keeping the lights on’ policy pursued in the immediate aftermath of the 2008 crisis. The strategy is based on finding the theoretical ‘sweet spot’ that...
The legal instrument governing the creation of the so-called Tripartite Free Trade Area (T-FTA) – encompassing 26 mostly Southern and East African countries – would be formally launched at the third Tripartite Summit being held in Sharm el-Sheikh, Egypt, this week....
More
 
 
Latest News
An end to wage negotiations within the local government sector could be in sight as a conciliator’s proposal, setting out a number of settlement suggestions to resolve the deadlock, was expected on Monday. The Independent Municipal and Allied Trade Union (Imatu)...
Development financier Eastern Cape Development Corporation (ECDC) executive Noludwe Ncokazi on Friday said the organisation had the “huge responsibility of ensuring business continuity”, following the resignation of ECDC subsidiary Automotive Industry Development...
South Africa’s second-largest oil refinery, Engen Refinery (Enref), is set to undergo a three-day planned maintenance outage from July 9 as part of an ongoing maintenance programme to ensure that the facility, which delivers a significant portion of South Africa’s...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
NHLANHLA NENE The main constraints to economic growth are domestic
Finance Minister Nhlanhla Nene earlier this month stated that, while South Africa’s 2015 economic growth target of 2% was achievable, it was not enough to deliver the tax revenue needed to combat the country’s challenges.
The World Steel Association has published the 2015 edition of the World Steel in Figures report, which shows an increase in steel production as well as provides an overview of steel industry activities from crude steel production to apparent steel use.
The 25-year master plan for Gauteng’s Aerotropolis project will go through a process of approval and adoption during June and July, says Aerotroplis project manager Jack van der Merwe. “We are also in the process of putting together a special purpose vehicle (SPV) to...
SOLAR PANELS The existing buildings in the Coega Industrial Development Zone lent themselves well to rooftop solar panel installations
The Coega Development Corporation (CDC) plans to fit 15 of its buildings, totalling 127 000 m2 of roof space, in the Coega Industrial Development Zone (IDZ), in the Eastern Cape, with solar panels.
The Supreme Court of Appeal’s (SCA’s) November 2014 judgment, ordering steel producer ArcelorMittal South Africa (AMSA) to hand over the 2003 Environmental Master Plan for its Vanderbijlpark steel plant to environmental pressure groups, confirmed the right of civil...
 
 
 
 
 
 
 
 
 
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