Stronger partnership between business and labour required
- Published on 23 Mar 2016
- HR Pulse News Desk
A stronger partnership between business and labour is urgently needed in order to improve international competitiveness within Southern Africa’s metals and engineering sector, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA).
“Without doubt, the metals and engineering sector is going through a fundamental structural adjustment, and not just a cyclical correction,” SEIFSA Chief Economist Henk Langenhoven said. From 1994 the sector grew for 14 years by 94% until the international financial crisis of 2008-2009 hit South Africa, resulting in a 21% contraction in output that year.
Since then the sector expanded by about 6%, but the level of value added to the economy today is still 16% lower and output is 25% lower than it was during the peak of 2007/8. “In order for the sector to recover to its full potential, innovation in terms of business solutions and better social cohesion between business and labour, in addition to policy adjustments from Government, are urgently needed,” Mr Langenhoven said.
He added that South Africa also needed to modernize production capacity and stabilize the labour market for the country to be more internationally competitive. “The African market is very highly competitive at the moment. This is due to the fact that the rest of the world is experiencing stagnation as far as economic growth is concerned. For us to benefit from the rising African demand, we need to make sure that we are internationally competitive by using new technologies to do more with the capacity that we have and to reduce production costs by, among other things, stabilizing our expensive labour market,” Mr Langenhoven said.
He said that it was of pivotal importance, therefore, that business and labour get together and deliberate on strategies aimed at ensuring that the Southern African metals and engineering sector is internationally competitive and geared towards taking advantage of the growth opportunities emanating from the rest of the African continent and elsewhere in the world.
Source: SEIFSA
