PPI is likely to aid CPI easing further, says SEIFSA
Johannesburg, 23 August 2017 – The declining Producer Price Index (PPI) increases chances of further inflation easing in the near future, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Economist Michael Ade said today.
Dr Ade was commenting on today’s Consumer Price Index (CPI) which showed the continued easing of inflation, with the numbers dipping below 5 % for the first time in just under two years. Annual consumer price inflation was 4,6% in July 2017, down from 5,1% in June 2017. The consumer price index increased by 0,3% month on month in July 2017.
He said there was a direct correlation between changes in the PPI at the retail level (finished goods) and consumers at the point of sale.
“It is important to monitor both indicators regularly as the CPI primarily measures inflation while the PPI acts as a preview of changes in the rate of inflation,” Dr Ade said.
SEIFSA anticipates the release of the CPI because of its importance, alongside the PPI, to the metals and engineering (M&E) sub-component of manufacturing. The CPI, alongside the PPI, are key instruments in financial decisions, costs mitigation and contract price adjustments (CPA) by companies in the M&E sector. Accordingly, SEIFSA has developed an input cost index which replicates the average cost structure of the sector, comprising of the CPI and PPI (amongst other cost variables), which are significant components of overheads as used in SEIFSA’s CPA calculations.
“The release is most welcome as the rate stays within the Reserve Bank’s target range and in line with SEIFSA’s expectations. The CPI is the main gauge of prices of goods and services and the release is most welcome to the public as the lower rate will reduce pressure on both over-indebted consumers and companies’ operational costs,” he concluded.
ENDS
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
Metals and Engineering sector seals 2017-2020 settlement agreement
Johannesburg, 23 August 2017 – The metals and engineering sector today signed the 2017-2020 metals and engineering sector settlement agreement at the Metals and Engineering Industries Bargaining Council (MEIBC) offices in Johannesburg.
In terms of the agreement between the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) and the, National Union of Metalworkers of South Africa (NUMSA), Solidarity, the United Association of South Africa, the Metal and Electrical Workers Union of South Africa and the South African Equity Workers Association, wages in the sector will increase by 7% in the current year, 6,75% in the second year and 6,5% in the third year.
Speaking at the signing ceremony, SEIFSA CEO Kaizer Nyatsumba said the conclusion of the agreement was a culmination of four months of intensive talks, first within the MEIBC wherein SEIFSA worked closely with all the other employer parties, and subsequently in its direct engagements with the respective trade unions in the sector.
Mr Nyatsumba said the wage deal would bring much-needed stability in the sector which has been bleeding jobs over the past few years. He said SEIFSA and the respective labour partners were aware of the enormous damage wreaked on the sector by cheap, often subsidised imports from China and other Asian countries.
“The process was long and hard, and there were considerable challenges along the way, but we are hugely relieved that finally we and our labour partners were able to reach an historic agreement on realistic wage adjustments for the next three years.
“Neither we nor the unions are entirely happy with the agreement reached, but we can live with it. We believe that it is the best possible agreement that we could reach under the circumstances, and we believe that it is fair to both parties,” Mr Nyatsumba said.
He said the conclusion of the agreement was historic because, for the first time in a decade, the parties reached a settlement agreement without resorting to industrial action.
“We came into these negotiations with vastly different starting positions, as is usually the case during such negotiations. However, to the credit of the respective parties, we moved gradually over time to the realistic figures at which we eventually settled,” he said.
Mr Nyatsumba also responded to the persistent statements by the National Employers Association of South Africa that SEIFSA represents 30% of employers in the sector and that it represents only big companies. He said there were 23 independent employer Associations that were members of SEIFSA. The Associations collectively represented approximately 170 000 people. He said SEIFSA’s various Associations included both small, medium and large companies, with 66% of them being small companies employing fewer than 50 people.
“Unlike our detractors, SEIFSA and its members believe that labour is an important, indispensable partner, and not an enemy. We believe that it is fundamentally important for employers and labour to forge a strong relationship based on mutual respect to be able to engage meaningfully on what needs to be done to improve the welfare of the sector. We believe that the two stakeholder groups need to strive for win-win solutions at all times, because there is no business without labour, and there are no employees without employers,” Mr Nyatsumba said.
“I would like to thank our labour partners for the constructive manner in which we have engaged during these negotiations. We believe that it is vitally important that we continue to work together to resolve all outstanding matters and, more importantly, to ensure the continued survival of the embattled MEIBC,” he concluded.
Ends
Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za
Web: www.seifsa.co.za
Issue 14 - 2017 Wage Negotiations Update
Today SEIFSA and all five trade unions registered with the Metals and Engineering Industries Bargaining Council (MEIBC) signed an important Settlement Agreement that concludes this year’s negotiations, averts any possibility of industrial action and lays the groundwork for industrial peace and stability for the next three years. A copy of the comments that I delivered at the signing ceremony this morning is attached hereto for your information.
The Agreement comprises the following key elements:
- A three-year agreement effective from 1 July 2017 to 30 June 2020;
- A collective undertaking by all the parties to seek the extension of a new, consolidated Main Agreement to all non-party employers and employees in the industry;
- An undertaking by all the parties to ensure that the application to extend the Agreement is not legally defective and that it is fully compliant and aligned with the relevant provisions of the Labour Relations Act 66 of 1995, as amended;
- The retention of Clause 37 (the protection clause against a compulsion to bargain at plant level), coupled to a full and final settlement clause locking in all the terms and conditions of employment contained in the Main Agreement and this Settlement Agreement – including those matters highlighted for on-going discussion during the currency of this Agreement (e.g. medical aid, housing, etc.) to a no-strike clause for the duration of this Agreement (i.e. until 30 June 2020);
- Wage increases on actual rates of pay across the board (i.e. from Rate A to H) of 7% in 2017, 6,75% in 2018 and 6,5% in 2019;
- An exemption provision entitling companies which are members of one of the employer parties to this Agreement to apply for exemption from the 2017 wage increases within thirty (30) days of the signing of the Settlement Agreement (i.e. by no later than 22 September 2017) and on or before 31 July 2018 and 31 July 2019 in years two and three respectively of this Agreement; andAn undertaking to back-date the increases to 1 July 2017 in return for the trade unions having honoured a commitment not to issue a strike notice, whilst negotiations were still continuing in good faith, in an endeavour to reach an agreement.
The opportunity to apply for an exemption is not available to companies which are not members of employer parties (Associations) which are not party to this Agreement.
The wage tables for 2017, effective from 1 July 2017, have been posted together with this Update issue.
A member company wishing to apply for a wage exemption should refer to the SEIFSA Management Brief Wage Increase Exemptions available on www.seifsa.co.za, which provides valuable guidance and assistance to members in making successful wage exemption applications. The brief also contains the requisite Bargaining Council exemption application questionnaire.
Member companies requiring any assistance in completing the necessary documentation are invited to contact the staff of the Industrial Relations and Legal Services Division, on (011) 298-9400, for advice and assistance.
We at SEIFSA thank each and every employer representative nominated by their respective Associations who gave unstintingly of their time to assist and play a crucially important role in the negotiations process.
We remain clear in our minds about our roles: member Associations, through the SEIFSA Council, developed the negotiating mandate. Working with representatives from the respective Associations, the SEIFSA Negotiating Team implemented that mandate to the letter and did everything in its power to arrive at the best possible deal under the circumstances.
We are immensely grateful to the SEIFSA Board, the SEIFSA Council, our member Associations and every member appointed to be part of the SEIFSA Negotiating Team that was so ably led by our Operations Director, Lucio Trentini.
The three-year (2017 to 2020) Settlement Agreement is the fruit of their collective labour.
PDF versions of the tables and the Wage Increase Exemptions are attached below.
Kaizer M. Nyatsumba
Chief Executive Officer
For Information:
Lucio Trentini
Operations Director
Direct | Tel: 011 298 9414 | Fax: 011 298 9514 | Cell: 082 449 6270
E-mail: lucio@seifsa.co.za