SA investment sector in decline

Markets and investments Photo: Flickr.com/Terence Wright

JOHANNESBURG – According to the Manufacturing Circle's Third Quarter Investment Tracker, the investments sector has declined. In the three months from June to September, companies held back on investments.

The industry says this is largely due to low demand locally and globally. The manufacturing industry says despite sluggish domestic demand, it continues to be resilient.

It has seen an increase in spending on property maintenance and replacement. While investments in growing existing or new properties remain unchanged from the numbers recorded in the second quarter.

The industry says it expects lower maintenance spending and higher investment on new plants and equipment in the foreseeable future.

But, there are concerns that Eskom’s proposed tariff increases will severely impact the manufacturing sector.

Executive Director of the Manufacturing Circle, Philippa Rodseth says, "This would effectively add to the costs of goods produced, not everything will be passed on to the consumer. That will negatively impact in terms of current investment in manufacturing, growth expansion and possibly also impact on employment creation."

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Investment in research and development remained the same in the third quarter, but insiders say there’s optimism this might increase in the last three months of the year.

Government and the private sector have been urged to commit to buying more locally produced products.

The industry says there's room for more supportive trade and procurement policies.

Proudly South African Chairman Howard Gabriels says, "When we buy a product that is produced in SA you are directly supporting the people who have manufactured that item. Those jobs are important because then it feeds back into our extended families and our community that becomes more sustainable."

The Manufacturing Circle will launch a new initiative later this month, aimed at generating one million permanent jobs in the industry over a 10 year period.

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