SEIFSA ANNUAL REVIEW 2018
CHAIRMAN’S
REPORT
The state of our metals and engineering sector is a reflection of the performance of economic activity in South Africa.While there was a general increase in production in the broader manufacturing sector – including South Africa’s heterogenous metals and engineering cluster – for the period under consideration, the contribution to gross domestic product (GDP) was a cause for concern.
T
he role played by our metals and engineering sector towards economic growth is still fairly negligible when compared to the pre-economic and production crises years of 2009 and 2014 respectively. The lacklustre economic productivity of our sector reflects the very disappointing growth in domestic demand since 2007, during which GDP growth has been hovering around 1% per annum. Through its representation of over 23 active member Associations, SEIFSA continues to interact with all stakeholders who influence economic activity. Notwithstanding some controversial resolutions adopted at the 54th ANC national conference in December, such as on land restitution without compensation, I remain confident that a Cyril Ramaphosa-led Government will do everything possible to revive the economy and to forge a working partnership among itself, business and labour. It is my hope that he and his team will work hard to undo the damage done to South Africa by his predecessor and to win back the international community’s respect for South Africa. Just as in the year under review, going forward SEIFSA’s key focus will continue to be on facilitating the operation of strong, influential employer Associations which reflect the views of their respective memberships. In its valuable engagements with stakeholders, the
Federation will continue to manage and represent the various views, needs, interests and objectives of all participating employers to advance the interests of our Associations and our industry.
BUSINESS AND ECONOMIC ENVIRONMENT Although production in the metals and engineering sector is generally increasing alongside international commodity prices, the cluster is still going through a structural adjustment and its challenges are still prevalent. Its growth pattern still fluctuates, productivity is generally poor, capacity utilisation is still below the required 85% and investment and profit levels are low. Domestic production costs have also been rising alongside output levels. Although these signal the resilient nature of businesses in our sector, regrettably, the optimism and hope for better future business prospects is not shared by all purchasing executives. There continues to be understandable concern among a number of stakeholders and observers that the country is deindustrialising. That concern is a direct consequence
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