High cost of labour is hurting global competitiveness

Decreasing the costs of labour while creating more jobs is key if South Africa wants to remain globally competitive in the export market. Even more so in Gauteng says Neil Harris, managing director of Freightit. “Labour costs especially on the manufacturing side in Gauteng have increased steadily causing us to become uncompetitive in the export market with the likes of India, South America and China.” Add to that the recent spate of strikes and workers getting above inflationary increases, and the situation becomes increasingly serious. “It will have to be addressed along with job creation. Government will need to make a clear distinction between what is sustainable job creation and what jobs are just being created for the 2010 World Cup and will become obsolete following the World Cup.” According to Harris it is extremely important for exporters and freight forwarding agents to be able to re-invent themselves continuously in these times to ensure they remain competitive and retain their market share. “Exporters and freight forwarders, who are obviously joined at the hip, must actively build a market for themselves that is sustainable. They must continuously be looking for the “warm currents.” He said exporters were extremely hard hit by the economic slowdown, with June and July being the worst months this year. “We are already seeing an improvement, but compounding the lack of demand for product internationally was the strength of the rand versus the US dollar in the main. Exports bloom anywhere from R9 to the dollar, and only then.” He said Gauteng exporters would continue to tread water while demand starts lifting from the First World countries once again. “They were all much harder hit than South Africa, but we are all connected by the same global village in one way or another. “With Gauteng being a major influence in terms of manufacturing and exporting reliance, it has been a tough year for the province, but we remain positive in anticipation of the recovery of the export market. Proactive exporters and freight forwarders have had the opportunity to rejuvenate their businesses.”