Government is to blame for job losses in manufacturing sector- Analyst

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Labour lawyer, Michael Bagraim believes it is terrible that manufacturing sector continues to lose jobs year after year. He says government is to blame for the the job losses.

“There are a lot of factors, but I tend to blame government for this. Manufacturing is still the blood life of job creation. Yes, we know we are competing with the mining industry. That whole sector is the exporting, but we are not beneficiating anything. So, we are not creating jobs.

A lot of manufacturing is becoming automated, especially in the the automobile sector and we are not employing people. We need to concentrate on the small business, the small business is going to be the future,” he says.

According to data released by Statistics South Africa on Monday, the local manufacturing sector lost over 300 000 jobs since 2005 and profits declined from 7% in 2005 to 2% in 2021.

The government data agency surveyed 11 400 companies to generate this report.

Stats SA’s 2021 manufacturing report indicates that despite a rise in the total income for manufacturing, the overall profit of the industry has declined.

The data shows that the contribution of manufacturing to the gross domestic product (GDP) also declined from 19% in 2005 to 13% in 2021.

Deputy Director General for Economic Statistics at Stats SA, Joe De Beer says, “It was a tough time for manufacturers during that growth period, 2005/08, the profit margins were very strong and that started flattening out, a very low 2% that we estimated in this survey. But within the profit margin it’s not a case where everyone has the same 2%.

You can see the telecom, medical equipment, still had a decent profit margin, 4.7% and then it slows down at the bottom of the pile and other manufacturing only recorded a one percent profit margin. We did say this period overlapped with the COVID restrictions.”