Despite the global economic environment deteriorating considerably this year and a number of macroeconomic trends already pointing to the global economy being in technical recession, the metals and engineering sector continues to show remarkable resilience and tenacity, according to Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Lucio Trentini.
In an interview with Business Report, Trentini said South Africa’s economy - despite being battered by floods, strikes, record load-shedding, soaring inflation and interest rates - was still set to grow by 1.9% this year and the metals and engineering sector by 1.1% (measured on a production basis).
However, this was not nearly enough to tackle the many current challenges and those that 2023 will present.
“A key achievement this year was Seifsa working closely with other employer organisations and industry trade unions in successfully getting the 2021/2024 main agreement covering wage increases and conditions of employment gazetted and extended to all non-parties, a feat last achieved in 2010. This is an important development as it introduces a degree of certainty, stability and industrial peace at least until June 30, 2024,” Trentini said.
Seifsa is a national federation representing 18 independent employer associations in the metal and engineering industries, with a combined membership of more than1 200 companies employing more than 170 000 employees.
The members of the federation, which was formed in 1943, consists of member companies ranging from giant steel-making corporations to micro-enterprises employing fewer than 50 people.
On a sombre note, Trentini said South Africa would be entering 2023 weighed down by persistent load-shedding, which could be even worse than Eskom’s record loadshedding in 2022.
South Africans have had more than 1900 hours of power cuts in 2022 alone - making it the most load shedding-intensive year.
Seifsa said with most global economies expected to enter a recession next year, it was hard to see where South African growth would come from.
“If we have learned one key lesson in the course of 2022 it is that the journey is difficult, but together we may just stand a fighting chance. As a country we need to rediscover the 2010 World Cup spirit. We just don’t know what we are really capable of as a united people. The power of collaboration, clarity of purpose and unity of vision is a powerful force and something that South Africa is desperately in need of,” Trentini said.
He said metals and engineering industries, for its part, had a torrid 2022.
“We emerged from the devastating Covid-19 pandemic and July 2021’s looting only to be hit by the punitive effects of the Russian-Ukraine war and soaring inflation. While the energy crisis is expected to dominate South Africa’s economic fortunes for years to come, it will undoubtedly take an extraordinary private-public partnership to finally resolve this issue,” he said.
He said there was little doubt the Covid-19 global pandemic was a black swan event of gigantic proportions, which wreaked havoc on the world and the South African economy.
“Lives were lost, businesses closed and many thousands of fellow South Africans remain without work. The pandemic has forever changed the world of work, how we meet, interact with one another and travel. The total shutdown of the economy was unprecedented and had a devastating impact on an already fragile economy. The metals and engineering sector and Seifsa had to survive all this and more.”
Looking at next year, the organisation said there was no doubt that this year was a particularly challenging year for employers across the sector. There was every indication that next year would be even more challenging with business confidence at its lowest ebb, rising inflation and interest rates, the country battling numerous home grown crises as well as elevated political uncertainty.
Trentini said prospects for economic growth and tackling unemployment, poverty and inequality ravaging the country seemed insurmountable.
“Nevertheless, we are a resilient and tenacious people, blessed with ingenuity, creativity and entrepreneurial flair that has helped us overcome many challenges. As the world begins to adjust to the new normal and slowly position itself for growth, we are confident that employers in the sector will not be shying away from the challenges 2023 will present.”
BUSINESS REPORT