Cool heads needed during wage negotiations - Manufacturing Circle

01 Feb 2016 | Admin Author

The Manufacturing Circle has called for cool heads to prevail in upstream sectors during the current wage bargaining season.

It warns that if this does not happen, manufacturing contraction and job losses in the manufacturing sector are a real prospect.

Spokesperson, Coenraad Bezuidenhout, says they're particularly concerned about the tone on which wage negotiations in gold mining took off, as well as threats to devastate the economy in the Western Cape with a resumption of strikes in the agriculture sector.

"Mining and agriculture are both important upstream sectors that both supply to and are being supplied by our manufacturing industries. Should production in these sectors be undermined by strikes, it would lead declining domestic demand, as well as production interruptions in domestic manufacturing," he said.

Bezuidenhout added that a number of food producers are struggling.

"We've seen with the latest manufacturing sales and production stats that they've only grown 0.7% year on year for the month of May which makes them particularly vulnerable. If those strikes go ahead as planned and they inflict the damage that Cosatu seems to have put in its aim then it will certainly hit that sector very hard," said Bezuidenhout.

"Sustaining domestic demand has been a key factor in helping our manufacturers to stave off the devastating effects of weak international demand. Our economy can ill-afford production interruptions, as meeting existing export orders are now ever more important, as well as the ability to leverage whatever positive effects there are on sales growth as a result of the weaker rand," he added.