JOHANNESBURG – The manufacturing sector says it remains a job-creating engine in the economy.
The industry will unveil a plan to generate one million direct jobs in the next decade.
During his medium-term budget speech, Finance Minister Malusi Gigaba said manufacturing is vital, as it forms the basis of a modern economy, by raising productivity levels and innovation.
The latest monthly purchasing managers’ index (PMI) came in slightly better than expected. But it shows the manufacturing sector was still contracting and provided little incentive for growth.
Unemployment figures from Stats SA shows manufacturing shed 50-thousand jobs in the third quarter. Government says the manufacturing sector is important, as it supports long-term sustainable growth.
"The manufacturing sector links agricultural production and resource extraction to high value addition, which is critical for our trade balance,” Gigaba said in his medium -erm budget speech.
“In a nutshell, manufacturing is critical to our aspirations as an economy to grow, create decent and sustainable jobs, transform and develop into a modern society."
Despite economic difficulties, government says the country must continue to invest in research, development, and innovation, as it will drive social and economic progress.
Insiders say the sector has the ability to ensure long-term, sustainable growth that will reindustrialise the economy. However structural barriers must be removed.
"We don’t have adequate aggregate domestic demand in SA. This can be augmented we think by import substitution. We import too many products,” said Andre De Ruyter Manufacturing Circle Chairman.
“We as consumers generally should be far more critical about products proudly made in SA. We should encourage exports a lot more. Our ports in SA are 88% more expensive than the global average…if we can address some of those structural blockages we will see manufacturing growing and investing."
The Manufacturing Circle will launch its Map to a Million plan soon, which will outline the creation of one-million direct jobs, over a 10-year period.