It’s a New Dawn … It’s a New Day

What a difference a week or even a day makes in South Africa right now, where there’s never a dull moment when it comes to new presidents and new economic policies. The good news is that the recent State of the Nation Address (SONA) put the spotlight firmly on the state of our sector, with its call to; “Address the decline over many years of our manufacturing capacity, which has deeply affected employment and exports” and “Promote greater investment in key manufacturing sectors through the strategic use of incentives and other measures.”

Against this backdrop one of the top priorities of government will be to convene a Jobs Summit within the next few months; to align the efforts of every sector and every stakeholder behind the imperative of job creation. In line with this, Sassda has already endorsed the Manufacturing Circle’s ‘Map to a Million’ initiative which aims to create 1-million new jobs in manufacturing in the next decade.

Transformative times

Another key aspect of the SONA address was the reference made to the fact the process of industrialisation must be underpinned by transformation. It stated; “Through measures like preferential procurement and the black industrialists programme, the aim is to develop a new generation of black and women producers who are able to build enterprises of significant scale and capability.”

Sassda acknowledges that the process of industrialisation must be underpinned by transformation and through our work with the dti and support of the Black Industrialists Programme, we are helping to develop a new generation of stainless steel manufacturers who can build enterprises of significant scale and capability. We have also introduced a key eighth transformation strategic pillar to our mandate and will also be holding a series of transformation workshops with members during the course of this year

The tide has turned but now what?

Despite the current state of ‘Ramaphoria’ we cannot ignore the reality of a 2017 that drained a lot of financial and emotional reserves and left many people and businesses reeling from the aftershocks of currency fluctuations and ratings agencies downgrades. Within the stainless steel sector specifically, this saw apparent consumption declining by 5.6% in 2017, with net exports of primary products (trade surplus) being up by 12% due to the combination of a 10% drop in imports and 9.5% increase in exports. Apparent consumption is now 28% off the peak seen in 2014. According to the latest Short Track Survey, as well as anecdotal evidence, although order levels were better in the last few months of last year, this improvement in orders has not carried over into 2018.

Palpable optimism

Despite this, the Short Track Survey has revealed a continued improvement in outlook. In February 2018, 41% of respondents thought that things would get better compared to 39% in January and only 19% in November. This resulted in the highest Sassda Expectations Index since the survey began two years ago. With the 50-point mark in the index separating expansion from contraction, February recorded a level of 65.5 compared with 65 in January. The second half of last year saw the index languishing at just above the 50-point mark.

So overall the optimism in the country is palpable and we hope to see a reverse in the declines seen in the stainless steel industry in the last three years, and a real transformation and growth in our industry to ensure its long-term sustainability. It’s a new dawn, it’s a new day and we’re feeling good!