EDITORIAL: Dismal data show manufacturers must compete
While incentives and protectionist measures have a role to play, this won’t address the fundamental challenge facing local industry — a decline in global competitiveness
The latest manufacturing data shows that production in seven out of 10 sectors declined in June, with weak local demand, cost pressures and slowing global orders weighing on activity. Accounting for more than 10% of formal employment in the country, manufacturing remains an important sector, and various government initiatives over the years have been designed to help stimulate production and job creation. Yet despite the various efforts, manufacturing employment has been in decline over the past decade. In 2008, manufacturing accounted for more than 14% of formal sector jobs. Since then, nearly 300,000 jobs have been lost, with only 1.744-million people employed in the sector today. While incentives and protectionist measures have a role to play, this won’t address the fundamental challenge facing local industry — a decline in global competitiveness.
A good example is the local steel industry, where SA’s share of global production has fallen from nearly 7% in 2007 to 3.7% in 2...