SA lack of demand stifles job creation in manufacturing
JOHANNESBURG - As big business sets out to prove it’s not on an investment strike, there’s a burning question related to job creation: if SA companies are in fact investing, where are the jobs?
Business Leadership South Africa’s (BLSA’s) recent report, which sets out to dispel notions of an investment strike, shows that 57 of the organisation’s 77 members are among the biggest job creators in South Africa.
According to the report, the median employment level of BLSA members in 2016 came to 10, 376. The largest employer had 110, 500 people.
The direct effect on total employment was 1.29 million people, while indirect effects implied that an additional 2 million people were employed in 2016 - an increase of 18, 833 jobs from 2015. The largest losses in employment were in mining and construction companies, mainly due to the sales of operations.
But despite statistics that impress and evidence of investment, job creation remains elusive. While business seeks to prove that investment continues to flow in, job creation in SA remains lethargic. At 27.7 percent by the narrow definition, unemployment is at a 14-year high and is expected to increase in the coming quarters.
According to the BLSA’s recent report, most of the 57 members who participated in the report were classified under finance and business services, followed by manufacturing. These two sectors combined had a direct output effect of about R905bn, which made up 48 percent of the 57 members’ output effect of R1.9-trillion.
At the launch of the Map to a Million initiative on Friday at the Gordon Institute of Business Science, Manufacturing Circle chairman Andre de Ruyter said: "If manufacturing can expand to 30 percent of GDP, between 800, 000 and 1.1 million direct jobs can be created, with five to eight times that are in indirect jobs." BLOOMBERG