Weak demand, low commodity prices, a struggling economy and lack of adequate skills are some of the major factors leading to over 50% of manufacturing companies considering job cuts as a cost-saving measure.
This was revealed in the Manufacturing Circle’s 2015 Third Quarter Review which cited some respondents as saying that business conditions in the third quarter were “poor” and “weak”.
“Some respondents indicated that, due to generally muted global demand, Chinese producers were lowering their prices even further to become competitive, resulting in more cheap imports entering the South African market to the detriment of local producers,” the report indicated.
Further, according to an article in Business Report, South Africa’s high unemployment rate has resulted in reduced consumer spending, leading to a reduction in demand and, in turn, output.
