Monumental job losses affect productivity in M&E sector

Monumental job losses over
the past three years have
negatively affected output
levels and productivity in
the metals and engineering
(M&E) sector, according to
the Steel and Engineering
Industries Federation of
Southern Africa (Seifsa).
Earlier this month Seifsa
CEO Kaizer Nyatsumba
announced that 25 000
people had lost their jobs
in the sector between July
2014 and June this year.
Chief economist at
Seifsa, Michael Ade, told
FTW that as a result of
the heavy job losses poor
production levels had
impacted negatively on the
sector’s contribution to the
country’s GDP.
“Given the fact that
export-led competitiveness
is often associated with
growth orientation in the
domestic economy, poor
output negatively impacts
the competitive edge of
companies in the M&E
industry,” he said.
The impact of substantial
job losses was far-reaching,
he added, resulting in
companies operating below
their full potential and
productive capacity being
under-utilised – leading to
an increase in costs.
“When operating under
increasing costs, companies
miss the opportunity to
improve efficiency and
effectively utilise new
technology due to the lack
of well-trained human
capital.
“This affects all
tiers of productivity,
including labour and
capital.”
He said there was a
need for government
to increase labour
market f lexibility and
assist businesses with
issues regarding tariffs
and dumping. “This is
important given that the
world economy is expected
to recover at a slightly
slower pace in the second
half of 2017.”