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Strikes may be game-changer

Oct 11 2012 14:34
Sapa
Johannesburg - The current spate of illegal and unprotected strikes may be a game-changer for South Africa's economy, Bankserv Africa warned on Thursday.

"Not only is the budget deficit now likely to be higher, but business confidence is likely to wane as the medium-term effect of strikes makes life difficult," the payment clearing company said.

This added uncertainty for consumers and the business sector.

The monthly Bankserv Economic Transaction Index (Beti) for October, released on Thursday, showed the economy was stagnating.

The Beti was calculated at 119.6, compared to 119.9 for September. This meant it was growing at little more than population growth, currently around 1%.

Economic transactions had now shown a seasonally adjusted monthly and quarterly decline for four months in a row, Bankserv warned.

The stagnation identified by the index was broadly in line with slower growth in new vehicle sales, declining passenger arrivals for both domestic and international flights at South African airports, and still declining year-on-year electricity sales.

The October 2012 Beti had shown only a marginal improvement compared to the same period last year, when it reached 116.8, after peaking in May. This indicated the economy was once again stalling.

Although the chance of a recession was small, the risk of an economic decline was far greater.

"Things will not work the way they used to," said economist Mike Schussler.

Business should revisit its strategy and look for new opportunities.

The violence at Lonmin's Marikana mine had changed the labour relationship, in that an unprotected strike managed to secure increases for workers which were well above inflation.

Employees were thus likely to expect higher wage increases than before.

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strikes  |  economy

 
 
 

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