Jobs in the South African Steel Sector Are Under Threat - SEIFSA
Mr Michael Ade, chief economist at the Steel and Engineering Industries Federation of South Africa, wrote that jobs in metals and engineering businesses in South Africa under threat as companies face a plethora of challenges. He wrote “Businesses in the metals and engineering sector are operating under extremely difficult conditions. Manufacturing businesses, including those in the diverse metals and engineering cluster of industries, are still grappling with a plethora of challenges, which increase operational costs, thus impacting negatively on production, margins and profits, with possible extended ramifications on employment. Domestic demand is low, underpinned by poor growth and nondescript high-frequency data. Even though the general expectation is for a rebound in the GDP in the second quarter of this year, the economy’s dismal performance during the first quarter is still reverberating. The real GDP measured by production decreased by 3.2% in the first quarter of this year, representing the second-highest quarterly decrease since quarter one of 2009, when a 6.1% dip was registered during the global financial crisis. Correspondingly, general household final consumption expenditure also decreased in the first quarter of this year, depressing both the derived demand for the metals and engineering cluster’s intermediate goods and selling prices. This has compounded the pressure faced by businesses.”
He wrote “Worryingly, the weak market fundamentals also dictate the functioning of the labour market within the sector, with most companies often choosing to shed jobs in order to contain costs and improve their bottom line.”
Given this context, one would empathize with some Steel and Engineering Industries Federation of SA member companies, which are involved in legal processes aimed at reducing jobs in order to stay afloat.
Source : News 24