Productivity statistics for 2013 confirm that South Africa still faces major challenges to improve its competitiveness and ensure this translates into improved national productivity.
An annual report released by Productivity SA yesterday revealed a mixed bag of performances in the main sectors of the economy.
Although growth slowed in the financial sector last year, it and agriculture were the only two sectors in which labour productivity and output remained strong. But both sectors were unpredictable, and needed to improve on business efficiency to mitigate costs.
The document’s release coincided with the launch of Productivity Month, which starts today. Its aim is to increase the country’s competitiveness, promote productivity and raise awareness of the potential role of productivity gains in growing the economy.
In agriculture, forestry and fishing there was an increase in real output growth of 2.2 percent last year despite a 6.8 percent decrease in labour productivity growth.
“A few sectors of the economy have performed well, with the mining sector yielding a growth rate of 3.1 percent in 2013 from minus 3.6 percent in 2012… but the positive growth rate was not accompanied by an increase in labour input in the mining sector, which experienced a decline of 3.1 percent,” Productivity SA chief economist Keneuoe Mosoang said.
He said the data showed that of the 20 manufacturing sub-sectors, seven demonstrated declining productivity indicators (labour, capital and multifactor productivity). The sub-sectors under most duress were leather, food and rubber.
Deputy Labour Minister Patekile Holomisa said the statistics were important because they would help the government better understand which areas needed attention.
He said productivity indicators in mining highlighted that in order for the sector to improve its real output, additional labour was required.
“[This] means the sector has been operating below its optimal efficiency in 2013. This is an area that we need to improve on as a matter of urgency.”
Another area that needed urgent focus was the electricity, gas and water sector. It experienced relatively lower growth in compensation of employees in relation to labour input growth. This suggested there was a reduction in the number of highly paid employees.
“This further suggests that the unit of labour costs should not be taken at face value, but rather an investigation of the changes in the compensation of labour between skilled and semi-skilled should be taken into account. This is yet another area that must be attended to, urgently,” he said.
The government would also look at the wholesale, retail, trade, catering and accommodation sector, which experienced a positive productivity growth rate, but it was lower than that of 2012.