Within the M&E sector, total employment declined by 8%, from 429 617 in the first quarter of 2020 compared to 397 586 in the first quarter of 2021. In first quarter of 2021, total M&E employment improved by 2 031 from the fourth quarter of 2020, representing a 0.5% increase while total employment for entire manufacturing sector improved by 4 431 in the same period. Real per capita earnings in the manufacturing sector increased from R35 074.99 in 2002 quarter three to reach R52 487.37 in 2021 quarter one, thus representing an increase of 49.6%. During the same period, real per capital income in the entire M&E sector also increased from R36 867.55 to reach R55 296.66, representing a 50% increase. On average, the M&E sector’s real per capital earnings is more than the total manufacturing sector’s real per capital earnings. Total trade in the M&E sector has favoured imports since 1995. South Africa’s net trade balance in the M&E sector averaged –R52 billion to second quarter of 2021. According to data from Quantec, South Africa’s total net trade balance in the M&E sector in the period 2017 to 2021 quarter two was -R350.6 billion, suggesting that the country continues to import more than it is exporting. Total exports during this period were R1.8 trillion, with imports at R2.1 trillion. According to the data of 2021 first six months to June, the South Africa’s M&E’s total net trade balance was –R27.4 billion, thus indicating a bias towards importing than producing. In most of the products within the M&E sector, South Africa is still importing more than its exporting. South Africa’s total net trade balance in the M&E sector in the period 2017 to 2021 quarter two in the African region is R463.9 billion. The country continues to export more than it is importing in the African region than in any other region. Total exports for the African region during this period were R525.5 billion, with imports at R61.6 billion.
a depressed market conditions this may have negative implications in terms of affordability from the customer base, thus affecting sales volumes. The mining sector remains the key raw material supplier into the M&E sector, and the PPI data for Mining is truly reflected of the input costs pressures for the M&E sector. Mining PPI increases is still above the 20% level from the May 2021 movement, averaging 17% in the first six months of 2021 to June. SEIFSA commends the Government on the implementation of targeted initiatives to address some of the structural problems facing the M&E sector as stated in its policy documents. In this year’s National Budget Speech, it was announced that the Government planned to spend R791.2 billion over the next three fiscal years on public infrastructure. It is imperative that there is engagement on the planned a projects with the implementing agencies such as Transnet, Eskom and Sanral, among others, so that the local industry is well positioned to be the preferred supplier in keeping with local procurement policy. SEIFSA is also encouraged by the various policy interventions that have been set out in the Steel and Metals Fabrication Mater Plan 1.0 and reiterates calls for the prioritisation of the implementation these interventions.
Chifipa Mhango Chief Economist
In the first six months of 2021 to June, Producer Price inflation (PPI) rose from 7.4% in May 2021 to 7.7% in June 2021 for final manufactured goods, with metals products, food products and computing equipment being among the largest contributors to the increase. The rise in PPI is concerning for the overall domestic inflation outlook; as producers pass on costs increases to consumers in a retail market. Prices for intermediate manufactured goods increased to a highest level of 16.4% in the year in June 2021. This is the category within which most products within the M&E sector fall in. In 10
State of the Metals & Engineering Sector Report - First half of 2021 review 2021-22
