Data provided by iNet BFA
Loading...
See More

Consumer crunch hits SA manufacturing

Aug 08 2013 14:47

(Shutterstock)

Related Articles

SA's competitive ranking matters - body

Manufacturing on consolidation path

Uptick in manufacturing

The shoe certainly fits for local SME

Turning e-waste into money

Fewer jobs in car manufacturing sector

 
Cape Town - There are indications of a degree of consolidation in the South African manufacturing sector, according to Coenraad Bezuidenhout, executive director of the Manufacturing Circle.

The latest StatsSA figures show South African manufacturing capacity is principally under-utilised because of a lack of demand.

General indications are that this would be mostly on the back of teetering domestic demand, as exports have enjoyed support from the weaker rand.

"Whereas the May 2013 production capacity utilisation figures for big SA manufacturers - at 81.4% - is 0.1% percentage point below May of last year, it shows a 2.5 percentage point increase above the February 2013 figure," he said.

Indicators in respect of current research being undertaken by the Manufacturing Circle seem to indicate that demand from African export markets are currently enjoying a surge.

"This would suggest that international players wishing to use South Africa as a manufacturing base from which to export to African markets would serve their interests best partnering with established South African manufacturers, where their product lines and distribution networks may be complimentary," he said.

"It is notable that the manufacturing categories enjoying the highest capacity utilisation – motor vehicles, parts and accessories (at 84.8%) and electrical machinery (at 82.4%) – espectively benefit from effective industrial policy support."

The support could be either through sector-specific interventions (the Automotive Production Development Programme, for instance, or upscaled local procurement, which is gaining traction.

Weak demand is sighted as a negative impact, particularly in the clothing and textiles, wearing apparel and leather products categories.

In addition, decline in the capacity utilisation of household product categories such as radio, television and communication apparatuses (-1.2%), furniture (-1%) and fast moving consumable goods (-0.6%) all point to the declining buying power of the domestic consumer.

The biggest downturn is in the petroleum sector (-2.6%) and is ascribed to emergency and maintenance shut-downs of liquid petroleum gas facilities.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

sa economy  |  manufacturing
NEXT ON FIN24X

Unions sign wage deal

2014-07-29 17:14

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
10 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

No more nice-to-have shopping sprees

Fin24 user Asia writes how she managed to rehabilitate herself from splurging on feel-good items and keep clean from the bondage of lifestyle debt.

 
 

Start saving...

Where can you stash your cash?
Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...