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Press Release – 2015/01/13: ESKOM POWER WOES HALT METALS AND ENGINEERING SECTOR RECOVERY IN ITS TRACKS

By 13th Jan 2015Sep 20th, 2019No Comments

Speaking after the release of the manufacturing production figures by Statistics South Africa, SEIFSA Chief Economist Henk Langenhoven said that the cumulative effect of the production disruptions during 2014 now amounts to a 2,5% contraction (eleven months of 2014 compared to the same period in 2013, bringing the 12 month decline to 2,1% of production).

Mr Langenhoven said that only three out of 10 of the sub-industries – other fabricated metals, special purpose machinery and household appliances – re recorded expansion over the eleven months of 2014.

Over a 12-month period, the more electricity-intensive sub-industries contracted as follows:

  • Rubber products -5,9%,
  • Plastics -2%,
  • Basic iron and steel -0,9%,
  • Non-ferrous -3,6%,
  • Structural steel -6,3%,
  • General purpose machinery -13%, and
  • Electrical machinery and equipment -1,9%

Mr Langenhoven reiterated SEIFSA’s previous estimate that electricity disruptions (under certain assumptions) as seen during November 2014 had the potential to wipe out up to 23% of production in the sector.

“The warnings from Eskom regarding the possibility of such occurrences during the year are of huge concern. The actual November production numbers are better than expected, but if the situation repeats itself during 2015, the calculations may prove ominously close to reality,” Mr Langenhoven said.

 While growth of more than 2% was hoped for during 2014 on 2013, the reality seemed to be a contraction of more than 2%.

“Representing 34% of manufacturing production, these numbers drive home the importance of recovery in the sector for manufacturing to gain momentum,” Mr Langenhoven concluded.

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