SEIFSA CEO Message

I write this message toward the end of an extremely challenging year not only for SEIFSA and its affiliated member companies, but also for the South African economy. The socio-economic aspirations of millions of South Africans, particularly of those on the fringes of the formal economy have taken a knock.

As such, with the culmination of 2021, we assume a reflective posture on the damage visited upon the economy and the socio-economic fibre of the country primarily by the unrelenting COVID-19 pandemic, the July unrest as well as the recent three-week strike in the metals and engineering sector. It sure does seem that there is very little to celebrate about the state of country and economy at this stage with very few glimpses of a promising socio-economic outlook.

It bears revisiting the damage caused by the COVID-19 pandemic on the lives of millions of South Africans. In the past, we have dealt a lot on the economic repercussions of the ongoing pandemic. However, we are beginning to take a lot more seriously the impact of the pandemic on human life and psyche. As a sector, we are deeply indebted to the hundreds of thousands of workers who have braved the frontline while dealing with the scars of the pandemic which has affected them directly and indirectly. They have shown remarkable resilience while companies have been forced to lay-off workers because of the pandemic. I am particularly pleased by the support of employers in the sector which they have extended to their workers in confronting the socio-economic ravages of the pandemic.

Similarly, the recent looting and unrest in July which affected mainly the economic hub of Gauteng and KwaZulu/ Natal did very little to quell and calm the jitters of investors as economic infrastructure was decimated in full view of the world’s eye. This has dealt untold socio-economic harm to the economy and on the businesses of our membership. We will continue to support our members which have been affected by the looting episode to ensure that they are able to revive operations and that they are on the road to a more prosperous future.

There seems to be no real silver lining in the horizon! However, the status quo demands an optimistic citizenry and cadre of entrepreneurs that will drive the change we wish to see. But, there are small, encouraging but minute signs of economic recovery as fresh economic data emerges.

Statistics South Africa recently stated that he South African economy recorded its fourth consecutive quarter of growth, expanding by 1,2% in the second quarter of 2021 (April–June). This followed a revised 1,0% rise in real gross domestic product (GDP) in the first quarter (January – March). Despite the gains made over the last four quarters, the economy is 1,4% smaller than what it was before the COVID-19 pandemic.

These figures cover the months of April, May and June. This means that the economic impact of the wave of severe economic disruption in KwaZulu-Natal and Gauteng, will only reflect in the third quarter GDP results that are due for release in December.

While the StatsSA figures indicate a sudden drop in economic activity during the second quarter of 2020 when lockdown restrictions were at their most severe, the economy has seen consistent growth since that shock, but not enough to return to pre-COVID-19 levels. Real GDP was R1 131 billion in the second quarter of 2021, 1,4% down from the reading in the first quarter of 2020.

Perhaps more daunting was the recent three-week strike which saw thousands of workers in the sector lay down their tools in order to demand a ‘better’ wage deal for themselves. The team at SEIFSA pulled out all the stops to ensure that a fair deal was achieved for employers.

I am grateful to the SEIFSA team for their unfailing dedication during a very stressful time. I am equally thankful of the Associations for their contribution, support and understanding in supporting a fair deal which protects the interests of employers and employees. I also extend gratitude to employers for their patience in a difficult negotiation environment.

We are also mindful that strikes rarely benefit any party. Workers take a knock on wages and some lose their jobs while employers lose millions in lost production and revenue. To arrive at a workable and fair deal, requires the effort of all parties on both ends of the negotiating table to negotiate in good faith and in the interests of the industry. We are thus thankful to all the unions for their dedication in doing their share to finding a just and fair deal for all.

SEIFSA is pleased that it has concluded a good deal for its members which has resulted in the constitution of a three-year wage deal which guarantees industrial relations peace, certainty and stability for all member companies until 30 June 2024.  The deal was struck on 21 October 2021 on behalf of all SEIFSA’s affiliated member companies.

This agreement followed a challenging negotiation and dispute-resolution process which comprised several formal, informal and bilateral meetings which commenced in May and ending with NUMSA signing the Settlement Agreement ending the three-week strike.

From a SEIFSA perspective and that of its Associations and membership, we are doing our bit in helping revive the fortunes of a manufacturing sector which finds itself in a precarious position. Recent manufacturing data is pointing towards the promise of an upward trajectory in the sector which should bode well for growth, improved revenue generation and sustainable jobs within the sector. We will continue to empower our Associations with support tools and interventions which should translate to a resilient membership base which continues to navigate and negotiate what is undoubtedly treacherous economic terrain.

We wish all our members, Associations and stakeholders a joyous and safe festive season as most companies approach the year-end shutdown. We are pleased to have travelled this journey with you in 2021 and we look forward to more support and collaborative energy in tackling the challenges facing the industry. I remain optimistic that 2022 will be a far better year than the one we have survived, with hopefully sustained growth and uninterrupted production being the order of the day for all of us!