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Manufacturers call for action on rand

Johannesburg - The persistently strong and volatile rand remains a major concern for manufacturers, according to the Manufacturing Circle's (MC) bulletin for the first quarter released on Friday.

The MC comprises 26 of SA's leading manufacturing companies, including Hulamin, PG Group, Consol Glass, PPC and Bell Equipment.

The organisation added that the strong rand eroded margins on exports and reduced competitiveness. They called for government intervention and the provision of "correct" incentives to boost the productive capacity of the sector.

These incentives, they said, should focus on achieving a relatively stable and more accommodative interest rate environment, providing specialised export support measures and achieving a "realistic" exchange rate.

The bulletin, which surveyed 18 CEOs in the sector, found manufacturing confidence deteriorated in the first quarter of 2011.

Export sales growth fell 75% in the first quarter, from 80% in the fourth quarter of 2010. Higher total input costs were also a concern for manufacturers. These were mainly driven by a surge in imported input components, on the back of higher commodity prices.

Employment levels remained unchanged in the first quarter, the bulletin showed, with the number of manufacturers who increased employment by 1% or more rising a modest 16.7% in the first quarter.
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