“Without doubt, the metals and engineering sector is going through a fundamental structural adjustment, and not just a cyclical correction,” SEIFSA Chief Economist Henk Langenhoven said.
From 1994 the sector grew for 14 years by 94% until the international financial crisis of 2008-2009 hit South Africa, resulting in a 21% contraction in output that year.
Since then the sector expanded by about 6%, but the level of value added to the economy today is still 16% lower and output is 25% lower than it was during the peak of 2007/8.
“In order for the sector to recover to its full potential, innovation in terms of business solutions and better social cohesion between business and labour, in addition to policy adjustments from Government, are urgently needed,” Mr Langenhoven said.
He added that South Africa also needed to modernize production capacity and stabilize the labour market for the country to be more internationally competitive.
“The African market is very highly competitive at the moment. This is due to the fact that the rest of the world is experiencing stagnation as far as economic growth is concerned. For us to benefit from the rising African demand, we need to make sure that we are internationally competitive by using new technologies to do more with the capacity that we have and to reduce production costs by, among other things, stabilizing our expensive labour market,” Mr Langenhoven said.
He said that it was of pivotal importance, therefore, that business and labour get together and deliberate on strategies aimed at ensuring that the Southern African metals and engineering sector is internationally competitive and geared towards taking advantage of the growth opportunities emanating from the rest of the African continent and elsewhere in the world.
“Partners, Not Adversaries: How to Forge A Stronger Partnership Between Business and Labour to Improve Southern Africa’s International Competitiveness” will be one of
the topics which will be robustly discussed at the 2016 Metals and Engineering Indaba scheduled to take place at the IDC Conference Centre in Sandton on 26-27 May 2016. Debating this crucial topic will be:
- Centre for the Study of Democracy Director, Professor Steven Friedman,
- International Labour Organisation Director Vic van Vuuren, and
- Solidarity General Secretary Gideon du Plessis, among others.
The Southern African Metals and Engineering Indaba will be attended by policy and decision makers, business owners, senior executives and other stakeholders in the metals and engineering sector in the SADC region, and will focus on the following topics, among others:
- Government Policy Interventions for a Sustainable, Globally-Competitive Steel Sector
- The Economy, Geo-Politics and Manufacturing: Has BRICS negatively affected South Africa’s Economic Relationship with the West irrevocably?
- A Delicate Balancing Act: The Link Between the Metals and Engineering Sector and the Mining, Construction and Car Manufacturing Industries
- Parasitic or Symbiotic: Relations Between Small Business and Big Business in the Metals and Engineering Sector
- Organised and hosted by SEIFSA in partnership with the Inudstrial Development Corporation, the Indaba is aimed at encouraging growth in the metals and engineering sector, which has under-performed over the past five years.
The list of the 2016 Indaba speakers and panelists includes Former President Kgalema Motlanthe, Shell South Africa Executive Chairman Mr Bonang Mohale, Black Business Council Vice-President Mr Sandile Zungu, International Monetary Fund Senior Resident Representative Dr Axel Schimmelpfennig, Executive Chairman of the EU Chamber of Commerce and Industry in Southern Africa Mr Stefan Sakoschek, US Embassy Economics Minister Mr Laird Trieber, National Empowerment Fund CEO Ms Philisiwe Mthethwa and Cadiz Corporate Solutions Director Mr Peter Major.