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RESERVE BANK’S DECISION

RESERVE BANK’S DECISION TO LEAVE REPO RATE UNCHANGED IS WELCOME, BUT A 25 BASIS POINT CUT WOULD HAVE BEEN PREFERABLE, SAYS SEIFSA

By | Featured, Latest News, Press Releases, SEIFSA News - Press Releases 2015 | No Comments

Johannesburg, 28 MARCH 2019 – The decision by the South African Reserve Bank (SARB)  to leave the repo rate unchanged at 6,75% is to be welcome, although a 25 basis point cut would have been preferable, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Economist Marique Kruger said today.

Commenting after the announcement of SARB’s decision to leave the repo and primate rates unchanged at 6,75% and 10,25% respectively, Ms Kruger said the Bank’s decision would provide relief to beleaguered business and individuals alike.

Ms Kruger said the Bank’s decision was particularly critical, given the need for South Africa to be ultra-cautious of heightened exchange rate volatility, which may arise after Moody’s rating agency makes a decision on the country’s sovereign credit rating tomorrow (Friday). She said Moody’s is expected to keep its outlook unchanged, despite the recent episodes of power outages, and that a downgrade may risk damaging a rebounding South African economy which is just coming out of a technical recession.

“Despite the decision to leave the repo rate unchanged, a 25 basis points cut at this very difficult time for businesses would have been helpful. A further rate cut would have helped in alleviating both the first-round and second-round effects of load shedding to businesses and consumers alike. The first-round impact arises from a direct increase in electricity spending by both companies and consumers, while the second-round impact arises from inflationary pressure – in the form of rising prices – of all other intermediary goods that are produced with electricity as an essential intermediate input,” Ms Kruger said  

She said a rate cut would have been a sensible decision for companies in the metals and engineering cluster, given the fact that demand for the intermediate goods produced in the cluster is a derived demand and the sector is very sensitive to exogenous demand and supply shocks. She added that the present scenario of subdued domestic growth, volatile production and selling prices (including low consumer and business confidence) does not provide comfort to both direct and anchor investors.

“However, SEIFSA still welcomes the decision to leave the rate unchanged as it augurs well for businesses and consumers in the medium term,” said Ms Kruger.

SEIFSA is a National Federation representing 23 independent employer Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing fewer than 50 people.

 

Press Release – 2016/11/11: SEIFSA WELCOMES POSITIVE, SHORT-TERM IMPROVEMENT IN PRODUCTION, BUT WARNS THAT THE SECTOR HAS NOT YET TURNED THE CORNER

By | SEIFSA News - Press Releases 2015 | No Comments

 

JOHANNEBURG, 1O November 2016 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the latest manufacturing production data released by Statistics South Africa (StatsSA) today, showing an improvement in the metals and engineering sector’s production for September.

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Press Releases 2016/11/02: SEIFSA CONCERNED ABOUT MORE SEVERE CONTRACTION IN THE METALS AND ENGINEERING SECTOR

By | SEIFSA News - Press Releases 2015 | No Comments

JOHANNEBURG, 01 November 2016 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) today expressed grave concern at the continuing contraction in the metals and engineering sector, as indicated by the recent Purchasing Managers’ Index data released by the Bureau of Economic Research/Barclays (BER).

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SEIFSA WELCOMES FINANCE MINISTER’S FISCAL PRUDENCE, BUT FEELS THAT IT IS NOT SUFFICIENT

By | SEIFSA News - Press Releases 2015 | No Comments

PRESS RELEASE – 2016/10/27: SEIFSA WELCOMES FINANCE MINISTER’S FISCAL PRUDENCE, BUT FEELS THAT IT IS NOT SUFFICIENT
JOHANNEBURG, 27 October 2016 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the fiscal consolidation intended by Finance Minister Pravin Gordhan’s Medium-Term Budget Policy Statement yesterday, but believes that more  tougher measures will be necessary to turn our economy around.

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SEIFSA CAUTIOUSLY WELCOMES CPI REPRIEVE WHICH RELIEVES CONSUMERS

By | SEIFSA News - Press Releases 2015 | No Comments

JOHANNEBURG, 21 September 2016 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) cautiously welcomes the inflation reprieve as indicated today by Statistics South Africa’s (StatsSA) inflationary data. This development is supported by the annual core inflation reading that has maintained similar figures in the July 2016 and August 2016 periods.

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METALS AND ENGINEERING PRODUCTION DISAPPOINTS AGAIN, IGNORING THE HEALTHIER GDP FIGURES

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JOHANNEBURG, 8 September 2016 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) today expressed its disappointment at the latest production figures which indicate a continuing slump in the metals and engineering sector – after the Federation warned earlier this week that the promising gross domestic production numbers overshot the sector.

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Press Release – 2016/09/06: FIXED-INVESTMENT EXPENDITURE IS IMPORTANT TO STIMULATE GROWTH IN THE METALS AND ENGINEERING SECTOR

By | SEIFSA News - Press Releases 2015 | No Comments

JOHANNESBURG, 6 September 2016 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) today welcomed Statistics South Africa’s announcement that the economy and manufacturing grew by 3,3% and 8,1%, respectively, in the second quarter – but warned that the country desperately needed political and policy certainty in order to ensure sustainable growth.

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Press Release – 2016/09/02: SEIFSA CONCERNED ABOUT SERIOUS DISTRESS FOR THE METALS AND ENGINEERING SECTOR INDICATED BY LATEST PMI

By | SEIFSA News - Press Releases 2015 | No Comments


JOHANNESBURG, 1 September 2016
– The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) today expressed its growing concern about the deepening distress level in the sector following the release of alarming Purchasing Managers’ Index (PMI) data by Bureau of Economic Research.

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