Manufacturing output continues to contract

South Africa’s manufacturing
sector is continuing to shrink
with the latest Standard Bank
Purchasing Manager’s Index
(PMI) for May 2016 showing
another contraction in output
– on the back of rising input
costs and ongoing “economic
challenges” in the country.
Francois Redelinghuys,
spokesperson for the workers’
union, Solidarity, expressed
concern last week about a
further 60 000 job losses this
year – most from the mining
sector and many from the
manufacturing sector.
“There are about 36 mining
companies that are currently
considering retrenchments
but we are equally concerned
about further contractions in
the manufacturing sector. This
not only results in job losses at
factories and plants, but in job
losses for those who provide
services to producers, including
the logistics sector,” he said.
Earlier this year, Minister
of Trade and Industry Dr
Rob Davies pointed out that
for every job created in the
manufacturing sector, 10 other
jobs were created in related
services sectors.
He stressed the need for
continued industrialisation
in South Africa to build
a stronger, more resilient
economy.
“Just over 20% of the
one million jobs lost during
the 2008 recession were
manufacturing jobs – that’s
over 200 000 skills that were
lost as well,” he said.
He acknowledged that
access to funding was often a
challenge for manufacturers to
increase production and said
his department had established
a Funding Forum for black
industrialists.