Fin24

SA in for tough ride

2012-10-04 16:09

Cape Town - South Africans can expect a tough two years ahead as the economy feels the pinch of strikes, analysts said on Thursday.

"Unless we have sensible heads putting their hands up now, we're going to see a [downward] spiral for the next few years," said Chris Hart, senior economist at Investment Solutions.

He said "hot-heads" in "cannon-fodder unions" were running the show, which made wage negotiations more militant.

The violent strikes in the mining and freight sector were destabilising and would weaken the rand.

"There will be a big dive for the competitiveness of the industry and a withdrawal of investment. We are making less of what we produce," Hart said.

Political uncertainty leading up the African National Congress's elective conference in December would also play a role.

The economist said the labour market was unlikely to settle in the next two to three years, with job losses and closures predicted.

The country would face multiple credit downgrades and high inflation.

Economist Mike Schussler said there was hope in the long term, but for now, it was "doom and gloom".

"Wildcat strikes bring a new level of uncertainty to South African labour relations. Added to that, in South Africa only four out of 10 adults work. Only two out of 10 work in the formal sector."

He said the length of the strikes was eroding investor confidence, which did not bode well for job creation or output.

"The actual output in the economy is definitely going to be lower. How much lower, we don't know right now."

Schussler said there was a 20% chance of the country hitting a recession, up from between five to 10%.

"The chances of over three percent growth over the next two quarters are less than 10 percent. We're in for a period of slow, stagnating growth."

The growth rate could recover from the second half of next year.

"Hopefully, we will learn lessons from the wildcat strikes and start to have honest discussion in South Africa; like what do we need to do to stay competitive and to grow jobs?"

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Comments
  • marc.ross.965 - 2012-10-04 16:16

    The only place doing well in this country is Orangia, almost zero unemployment, zero strikes and property prices are soaring. Makes you think, doesn't it.

      klippies.coke.7 - 2012-10-04 16:26

      It sure does

      dewalds3 - 2012-10-04 16:27

      Also virtually zero crime - children play anywhere outside till well agter dark. And their municipality is in the green....

      dewalds3 - 2012-10-04 16:28

      And the correct name is Orania.

      darren.raath.5 - 2012-10-04 16:57

      zimbabwe here we come.

      boltonbarry - 2012-10-04 16:57

      Where exactly is this Orania

  • thabang.bonang.7 - 2012-10-04 16:19

    This is not good news. However the good news is that R203, 000, 000. has been approved by the government to revamp the president's house.

      darren.raath.5 - 2012-10-04 16:58

      yes this is really good news. a bigger place to walk around in the nude displaying the spear.

      thabang.bonang.7 - 2012-10-04 17:01

      Not forgetting the King Zwelithini's budget increase of R4,000,000 over last year's R55,000,000. Oh! and the additional R18,000,000 for his new wife's palace and a new house at the Nyonkeni palace.

      darren.raath.5 - 2012-10-04 17:06

      i wonder how many showers it has???

      marius.j.rensburg.3 - 2012-10-04 18:42

      hey! It cost allot of money to run a sex-farm ! The R203m upgrade is to accommodate the new "wives" planned for the next financial year. It's all about priorities, people. Children sit in the veld attending school, but the sex-farm needs an urgent upgrade. JZ also wanted a R2b plane .... but we can't all have what we want....

      acm.munro - 2012-10-04 19:33

      Not forgetting that all of us are contributing towards the maintenance of his .. how many? wives .... and how many of his many children? and that while a large number of people are living in shacks with husbands trying to look after one wife and a few children .... have anybody seen the pictures of that mansion which is costing us R203000 to revamp??

  • colin.taylor.9883 - 2012-10-04 16:24

    As if it hasn't been a tough road so far.... Stop the gravy train and the wasteful spending on crap....

  • mark.haupt.31 - 2012-10-04 16:24

    We are going downhill fast, and it's so obvious with the cANCer extremely busy booking their seats on the gravy train and the militant unions encouraging lawlessness to get their share of the attention. Come December they'll all take over Manguang to eat, drink & be merry, the unemployed will grow even more militant and the protests and unhappiness will boil over. Next year's going to be break point - a no-win situation for the country, and the economy, and we're all going to lose big time.

  • makavelithedonkilluminati.shakur - 2012-10-04 16:25

    Does this mean that Zuma won't be getting that R2.8bn for Zumaville and that R200m for his home upgrade anymore?

      juan.prinsloo.750 - 2012-10-04 16:44

      Of course dude, the motto is "me first" stuff the rest. Zuma has to make hay while the sun shines as his days are numbered.

  • Mike Peach - 2012-10-04 16:37

    That headline should have read south africans in for a tough time except a few self important elitetists,we need to wake up and do something,keep stealing from us when we have nothing left thats going to make us very dangerous.

      justice.molahlehi - 2012-10-04 18:02

      I so wish we are given a chance to see the faces of candidates who are eligible for presidency in the next elections.This rubbish would end right away.

  • Sonnyboy Maluleke - 2012-10-04 16:45

    Strike wont end now as bosses don't pay workers fair wage, one of the company got exempted for 3 (three) years not to pay workers bonuses (13th chaque) and the bargaining council is failing those workers also the dept of labour was called in never assisted the people who pay tax. Is a shame because this company got the status of BEEE and now the company is a State Own Company. How is that? It wont let the employees strike and say the State under Zuma has failed them.

      tobydt - 2012-10-04 17:29

      I havent received a 13th cheque, ever.

      riaan.mostert.58 - 2012-10-04 18:11

      A bonus is not a right moron, it's a privilege.

      amanda.victor.92 - 2012-10-05 00:36

      Hey Sonnyboy, how about you start your own business and then you can pay your wekkers wonderful salaries? It's easy to talk when you have no skin in the game. When there are no more companies there are no more jobs! Get it????

      konstabel.koekemoer - 2012-10-05 13:40

      No Sonnyboy, the strikes will end when mines and other companies shut their doors and all their workers are laid off.

  • PeterJohn - 2012-10-04 16:48

    Would the last person to leave South Africa, please turn off the lights.

      mc.segal.5 - 2012-10-04 17:11

      Peter the lights will be out long before that..

      crystal.holder.77 - 2012-10-08 12:32

      There will be no electricity...lol.... the lights are already going off

  • julius.hond - 2012-10-04 16:50

    you can take these donkeys to the water, but hey...

      andrez.kolesky - 2012-10-04 18:50

      You can lead a donkey to water, but it's still an ass.

  • nhlanhla.madide - 2012-10-04 16:52

    Destruction is a form of construction. The shell of our understanding is cracking, rightfully so, it should. It's about time real and decent (which is most of us) South Africans stand up. If we spiral out of control it would only be good for it will create an opportunity to re-create our country. And this youth we have seems promising (with the element of inequality based on race having been almost eliminated).

      boltonbarry - 2012-10-04 16:56

      How exactly are this youth promising?

      christelle.james.7 - 2012-10-04 17:17

      What?? You cannot be serious. Look at Zimbabwe - who is helping them out now? We are. And when we are done........nobody south of us buddy!!! I cannot believe what I just read. I simply cannot understand the logic.

      markplstephens - 2012-10-04 21:10

      the whole order out of chaos theory. It probably would work in the very long term (20+ years) Break the country down until everyone is forced to work together to rebuild it because noone has anything left to protect and thus be selfish. I certainly dont want to give away my cushy lifestyle and will therefore fight to keep the status quo for as long as possible. Thats the short sighted view everyone with anything to lose holds and, because we are a strong economy and there are so many of us, we will keep the poor masses at bay for some time to come. On the other hand, if the poor masses put their heads together and thought for a moment, they would realise that this is not the opportune time to make their move. ask for rational wage increases and allow for more people to enter the work force. make SA appear a good place to invest (sadly this is through cheap labour) When the African economy is booming in a few years time just like asia is now, then make their move and demand better pay when they have more to bargain with or when the rest of the workd is so heavily invested they have no chioce,

      Zahir - 2012-10-05 07:43

      Yes the anc spent 18 years to destroy education , health, police etc in record time

      janet.pretorius1 - 2012-10-05 08:52

      @markplstephens - some thoughts - How is it the majority of the "intelligent" population expect the working populace at the level of miners to suddenly forget about the basics of food and shelter and start thinking of how striking affects the economy and FDI etc - when the economy and FDI couldn't give a damn about them? This is the responsibility of those in power - the CEO's, BOD's? They can lose something like R9B in over 9 months due to strikes, but can somehow afford to lose more in taking forever to rectify inequalities in salaries??? The business and employees are co-dependent. Only now are mines (at suggestion of the unions) considering restructuring entry level salaries. Where have the highly educated, experienced strategic self serving HR and top mngt been all this time? If they are so clever - surely they should have thought of this before and been preventing strikes by paying fair wages and still running profitably. It is not for nothing that SA has one of the highest Gini coefficient's (inequality) in the world. The sooner mngt realise this and do something about it - the sooner the strikes will stop. What is logical about paying 5% increases on lowest levels whilst mngt s paid 20%+ increases! And these 20% increases often constitute several employees' yearly salaries. We have all been brainwashed by big business to see their perspective only.

      markplstephens - 2012-10-05 11:38

      Thanks janet, I get you. I was intending a hint of irony,if I lived in those conditions, risking my life every day for the bare necessities to survive, I would also want out. It has to be said though, the miners are lucky we have the strict labour laws we have in this country. If we didnt, the strikers would be fired and the rest of the 25% unemployed would be brought in. I often wonder what would happen if a compassionate CEO took office and decided that the top (or just himself) didnt need the staggering cheque that comes with the job and offered it out as bonuses. there are only so many holiday houses you can use in a year with that job. I am just a lowly aspiring farmer but I hope to be on as even a footing as possible with my workers (colleagues) if for no other reason than to inspire more dedicated work. Capitalism breeds selfish people. or is it just the way Commerce is taught?

      glenjohnshaw - 2012-10-08 15:07

      nhlanhla, Where do you come from my friend ? Antarctica ? Do you want an Angola, Mozambique, Zimbabwe, Rwanda,Burundi, Congo (DRC), in SA? I think all of the countries mentioned would seem like a gentle transition compared to what is going to happen in SA. The best of luck to you my friend.

  • stirrer.stirrer - 2012-10-04 16:53

    I love the "logic" of the striking truck drivers. Their strike is a major contributor to the weakening of the Rand. As it weakens, the fuel price goes up, with the effect that (a) employers have less money to pay them with, and (b) making rail freight a viable option again. Talking about shooting yourself in the foot!

  • acm.munro - 2012-10-04 16:56

    So what we have been predicting is happening. With the rand weakening and a rise in petrol and food prices expected, and the Government coffers getting less tax from the mines, how will the State balance its books? Increase VAT?

  • yolandi.reichert - 2012-10-04 16:58

    My heart is breaking for SA!!

  • bakers.dozen.14 - 2012-10-04 17:00

    Let’s all get together and make an offer to purchase Madagascar. Let the ANC have this one. Then in 5 years when it’s all over we come back and re colonise

      mc.segal.5 - 2012-10-04 17:13

      Magic idea at least the people there will appreciate some capital input.

  • david.wolpert.39 - 2012-10-04 17:07

    Two years???-The current madness will continue for as long as the ANC is in power.Our leaders,too busy living it up and enriching themselves and their buddies,have neither the will nor the intellect in many cases to stop the country from burning. This is not a temporary,short term problem.

  • tobydt - 2012-10-04 17:36

    Well, things have to get worse, before they can get better. With the recession, job losses, increase in consumables, the pressure will be on the ANC. They will suffer voters, until they are not in power anymore. Byt vas.

      acm.munro - 2012-10-04 17:52

      The only pressure the ANC will feel will be amongst the leaders .. and this pressure not related to SA or job losses or increased prices .. but how they are going to keep their high-paid jobs!!

  • boramk - 2012-10-04 17:36

    A town of 500 people compared to a country of 50 million?

  • hasani.malungana - 2012-10-04 17:46

    This is avoidable if leaders take a decisive action to end the strike. We seem to b wanting to avoid Marikane by all costs, but the settlement reached in pursuit of this appeacement is backfiring. The strikes were bound to happen as the level of inequality takes its peak, but not in a sporadic manner as we see today. What we see today is failure of decisive leadership across the polical economic level.Leaders are hoping these will fade away like the spirit of parafine, but this may may bring dire consquences and lead to uncotrollable violence

      tobydt - 2012-10-04 17:50

      Too scared to act with Mangaung looming on the horizon.

  • nick.burgin.3 - 2012-10-04 18:28

    to boltonbarry. Todays youth is just as promissing as 10 years ago or 20 or 30! But today they are allowed to think for themselves and do things without beeing harrassed by the police and government. Until 1994 the majority of the people were not allowed to think and had to do what they were told. And now the very minority responsible for the past is blaming the majority of not being able to do things right. Give the new youth a chance!

      JamesMWood - 2012-10-04 20:53

      Wow, really, todays youth promissing. I would never have guessed what with students striking simply because they don't like a professor or teacher. Bring back corporal punishment and then we'll have a better \youth\ not this undisciplined rabble

  • peter.strydom.37 - 2012-10-04 18:40

    Go tell this to the illiterate bunch of thugs who hold the country to ransom and see if they make sense of their senselessness, these actions boarder on treason.

  • robert.doyle.712 - 2012-10-05 17:00

    Sunny Souf Effrika lol

  • crystal.holder.77 - 2012-10-08 12:27

    Thank you to the ANC!!! You are raping the country!!

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