Numsa: Manufacturing never really recovered after 2008

Cape Town – South Africa’s manufacturing sector has bled 400 000 jobs since March 2008 and the industry has never really recovered from the global financial crisis, says the National Union of Metalworkers of SA (Numsa) in its secretariat report. 

Numsa is having its 10th national congress in Cape Town where delegates are deliberating on the state of metals sector and the socio-economic and political environment, while also electing a new national leadership. 

In its report, Numsa says manufacturing has grown very slowly from the first quarter in 2010 to the fourth quarter in 2012 – by an average of only 0.07%. 

“From the first quarter of 2013 ‘growth’ slowed even more to an average of 0.03% per quarter,” Numsa said in its report. “And by the second quarter of 2016 manufacturing output was still less than what it was in 2008.” 

READ: SA earns R2.2tr from manufacturing 

Numsa says the composition of the manufacturing sector has also changed over time with the metals sector’s contribution declining over the past 10 years relative to other sectors. In 2006 it was the largest sectoral contributor to GDP at 28%, and in 2015 it has dropped to 22%. 

In the secretariat report, Numsa also notes that men in the manufacturing sector are more vulnerable to job losses than women. “Currently, two out of every three workers employed in manufacturing is a male worker.” 

Most of the job losses occurred in Gauteng, KwaZulu-Natal (KZN) and the Western Cape. 

The end of the commodity boom 

Numsa says in its report although the metals sector made a brief recovery after the 2008 financial crisis, it was hit again at the end of the commodity boom in 2013. 

READ: Commodity collapse spells trouble for developing countries 

“The steel industry internationally is staggering in the face of over production in China, declining demand and a fall in steel prices. 

“In South Africa, the steel value chain has faced additional pressures in recent years, including rising and cheap imports, the abuse of competition policy with regard to steel pricing and high administered prices which raise production costs and trade costs, such as costs at the ports,” the report says.