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‘Demand conditions downbeat’

Domestic and global demand conditions remained downbeat during the third quarter of 2012, the Manufacturing Circle said on Thursday.

“Although the number of jobs in the manufacturing sector increased by 49,000 during the third quarter, according to Statistics SA, the manufacturing labour market in South Africa remains under stress,” Coenraad Bezuidenhout, Manufacturing Circle executive director, said in a statement.

Filomena Scalise

Since 2008, no single year had recorded a consistent trend in manufacturing employment.

“Our survey shows that expectations are roughly divided between fragile and stable conditions for manufacturers over the next year, with the next six months still expected to deliver significant challenges.”

The proportion of respondents reporting positive growth in the value of domestic sales had declined from 70 percent in the second quarter to 60 percent in the third.

“Domestic sales also still significantly outperform export sales, with 54 percent of respondents allocating less than 10

percent of their production output to the export market,” he said.

Although economic activity seemed to be on the rebound, “structural bottlenecks” such as high production costs posed a “drag” on the recovery of manufacturing activity.

The outlook for manufacturing activity remained lacklustre. Some of the factors dragging it down included the effect of prolonged wildcat strikes, declining investment and activity in the mining sector, Eskom's proposed electricity tariff hikes, unfavourable labour conditions and Chinese imports. - Sapa

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