The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has added its support to the decision announced last night to move the country to level 1 of the national lockdown.
It will give struggling businesses in the Metals and Engineering (M&E) industry much-needed momentum in their recovery efforts,” said Seifsa chief economist Dr Michael Ade.
“After nearly six months of lockdown restrictions that included, among other stringent measures, the closure of the country’s borders, businesses will finally be able to ramp up their importing or exporting activities. However, as President Cyril Ramaphosa conceded during his address to the nation last night, global demand for goods will remain constrained in the medium term,” he added.
“The anticipated increased in export activity bodes well for export-oriented manufacturing, in line with the national industrial policy framework, as it will result in increased production activity and access to global markets, enabling businesses to ramp up their recovery.”
He said that businesses that relied on imported raw materials had been significantly set back by restricted access to supplies due to border restrictions.
“The move to level 1 and subsequent liberalisation of international travels on October 1 means that executives will be able to travel and conclude contracts towards selling or importing raw materials at cheaper prices in order to manufacture and sell, thereby improving their margins and profits,” he said.
Based on necessary anti-Covid-19 precautionary measures like social distancing remaining in place longer, Seifsa has however revised its growth forecast for the sector for 2020/21 from the initial 0.6% to -9.1%.