CHAIRMAN’S
report
I will focus on a few issues relevant to the period under review and some challenges we, collectively, need to address in the year ahead. I note that the activities of SEIFSA over the past year are detailed in the Chief Executive Officer’s Report. Our metals and engineering sector is a reflection of the extremely disappointing performance of economic activity in South Africa. While GDP growth beat expectations for Q2 2017, it is far too early to anticipate that we are past the worst. We know that real steel consumption is a key indicator of positive economic activity and we recognise that a continuing GDP below 2,5% further drains and diminishes employment, capacity and resources in our industry. Through its representation of over 20 active member Associations, SEIFSA continues to interact with all stakeholders influencing economic activity. We should anticipate that the year ahead will remain challenging for our industry, not least because of dysfunctional leadership, poor management and performance of State-owned entities, inadequate response to the scourge of corruption and imposition of policies impacting negatively on economic activity and mediumto long- term decision making required by industry. SEIFSA’s key focus will remain on facilitating the operation of strong, influential employer Associations which reflect the views of their respective memberships and the Federation will continue to manage and represent the various views, needs, interests and objectives of all participating employers in the industry at every relevant stakeholder entity and through every forum necessary to secure the requirements of our Associations and our industry.
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SEIFSA ANNUAL REVIEW 2017
Michael Pimstein President and Chairman
BUSINESS AND ECONOMIC ENVIRONMENT Regrettably, as we all know, the fortunes of the metals and engineering sector deteriorated during the financial year ended in June 2017. There is understandable concern in a growing number of quarters that the country is de-industrialising. This concern is a direct consequence of the ongoing decline of manufacturing’s contribution to South Africa’s Gross Domestic Product (GDP) over the past few decades, as other sectors such as financial services and tourism grew at a much faster pace. Our sector’s share of manufacturing in the first quarter of 2017 was 29.17%, effectively contributing 3.5% to the GDP. A slightly stronger rebound in production is expected in the second quarter of 2017, given that the most recent available data recorded a marginal yearon-year improvement of 29.09%. On aggregate, the sector seems to have recovered from the contraction (-4.5%) recorded in the financial year end of June
