Johannesburg - Business confidence in the manufacturing sector was weak in the third quarter of this year, according to a Manufacturing Circle survey.
“However, manufacturers expect greater levels of stability over the next 12 months to two years, even though this outlook has weakened somewhat as well,” executive director Coenraad Bezuidenhout said in a statement.
He said strikes and instability in labour relations had shaped the manufacturing environment.
“Other key deterrent factors during the quarter included elevated labour and energy costs, a volatile rand, and sluggish consumer spending.”
Bezuidenhout said many respondents projected soft conditions in the sector because of strikes, the impact of new broad-based black economic empowerment codes, and the inability to compete locally and globally.
“All the same, some manufacturers experienced increased demand due to renewable energy projects,” he said.
“On the export front, African demand for South African manufactured goods remained resilient during...(the third quarter).”
Bezuidenhout said the government's renewable energy projects were expected to provide further business opportunities.
“In general, however, the government's local procurement programme still only benefits 24 percent of firms surveyed,” he said.
“Consequently, manufacturers in general do not expect the government's procurement programme to support growth in their activities.” - Sapa