Strike impacting negatively on exports

The strike season could hammer SA’s exports, according to economists and transporters. The increasing and ongoing labour revolt will have a major economic impact on the country, with a direct bearing on exports – slowing down the transporting of goods via road, rail and ports in the country, leading economists told FTW. Mike Schussler of economists.co.za, said while it was too soon to put a figure on the strike action that has been plaguing the country for the past three weeks, estimates were that it was costing the country millions. “I would say at least a couple of million has already been lost outside of the fuel industry and no doubt there will be a knock-on effect,” he said. “How big that effect will be is still uncertain and debatable depending on whom one speaks to. “I would estimate that this strike is costing us at least R10 million-plus already and, while in the bigger scheme of things, this might be considered small, it is serious enough that it can, and possibly will, have an impact on our economic growth.” Whilst no major problems have been noted in its service delivery, the trucking industry, however, is starting to feel the impact of the ongoing strike – with fuel reserves running low and uncertainty over how much fuel suppliers have in stock. According to Gavin Kelly, spokesman of the Road Freight Association (RFA), perishables are already under stress, while non-vital goods delivery has been delayed for a while – and, in some instances, come to a near standstill. “When the strike first started there was a bit of panic, but operators are seemingly starting to deal with the impact, by better planning to be able to deal with an ongoing strike.” Kelly said smaller truckers were feeling the impact more severely. With talks of storage supplies of fuel decreasing, and with no end to the strike in sight as yet, the worst could still be to come. According to Schussler, with strikes it generally becomes very difficult after the first week to make up productivity and therefore there is almost always a negative impact not just on the economy but on confidence. “Truckers are usually very positive people. But if one looks at the environment they are now operating in – where they not only have to contend with increased tariffs in the form of the tollgates and new regulations like AARTO – they also have to deal with the impact of the strikes on their businesses. All of this is resulting in business confidence taking a serious knock.” But, said Schussler, the one positive about the strike was that this was seemingly one mass action where it was not going to go the workers’ way – an important lesson for the country. “The right to strike is enshrined in the Constitution and very important for a democracy, but it should be the last resort. In South Africa it is the first, and maybe it is important for us as a country to realise that striking is not always the answer.” However, according to Tony Twine, chief economist at Econometrix, the strikes in the energy sector have the greatest potential for damaging economic production if prolonged much further. “No energy means no production,” he said. “A quarter of GDP ends up as exports. We don’t know the extent or duration, but many companies will feel the pinch.” Economists have also warned a decline in production could push up prices of commodities in the long run. With some 70 000 workers belonging to the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu) remaining on strike, the decision by the National Union of Mineworkers (NUM) last Sunday to also down tools has been met with apprehension. Some 150 000 coal miners are expected to go on strike, said the union.