Filomena Scalise

Johannesburg - Demand for South African manufactured goods was dismal in the second quarter of 2014, Manufacturing Circle said on Thursday.

“Among the factors that affected demand are - a number of construction projects reaching their terminal phase over the quarter, poor performance of the domestic motor industry performance... (and) increased competition on the global market,” it said in a statement after releasing its 2014 Q2 survey.

Manufacturing Circle is made up of South African manufacturing companies from various industries.

Its survey covered demand locally and for the export market.

The survey found that the short term outlook for manufacturing conditions was “bleak” with 74 percent of respondents indicating employment would either be kept the same or job cuts would be likely over the next 12 months.

It said the main reasons for the weak outlook included uncertainty in the labour market, elevated wage and input costs, competition from imported goods, low productivity of labour, a lack of adequate skills, and faltering consumer spending.

The survey said the second quarter showed “downbeat” business conditions in the manufacturing sector owing to industrial action, weak consumer demand and elevated input costs.

“As a result, profitability was under strain during Q2 2014,” it said.

“Shortages of adequate skills and raw materials, electricity and water disruption as well as a fall in labour productivity characterised supply conditions experienced... in Q2 2014.” - Sapa