Polished diamond prices down

Labour strikes causes second recession and more job losses

Cape Town – The country’s economy has battled to fully recover from the impact of the 2009 recession due to low productivity in the mining and manufacturing sectors.

The sluggish growth has mainly been attributed to the bruising strikes in both sectors that have led to contractions in the first quarter.

This is according to Statistician-General Pali Lehohla, when briefing journalists at Tshedimosetso House, in Pretoria, on the impact of the losses in production in manufacturing and mining on the economy.

The briefing was also a microscopic view of data that Lehohla released when he announced the Growth Domestic Product (GDP) for the first quarter of 2014 in June.

“After the 2009 recession, the economy has battled to get out of recession and there has been a negative impact both on mining and manufacturing.

“Strikes also have shown that they have got a negative impact, particularly in terms of motoring production in September 2013,” he said on Monday.

Lehohla was referring to industrial action in the automotive sector, late last year, where work stoppages cost the country’s auto makers 50 000 in loss of production, which resulted in exports declining by 75% year-on-year.

Lehohla said between September 2006 and March this year, 188 000 jobs were lost in the manufacturing sector, which was a decrease of 14%.

He said the mining sector shed 48 000 jobs between June 2012 and March 2014, which was a decrease of 9%.

The mining sector took several knocks to production, Lehohla said, citing the Marikana strike in August 2012 and the AMCU platinum strike in January 2014 — a strike that recently ended after dragging out for more than five months.

He said, however, that it was too soon to indicate the impact that the ongoing two-week strike by the National Union of Metalworkers SA (NUMSA) would have on the economy.

During the first quarter of 2014, the annualised GDP slowed to -0.6%, forcing the Reserve Bank and other forecasters to revise the country’s growth downwards.

The manufacturing and mining sectors experienced a contraction of -4.4% and -24.7% respectively.

“A number of commentators are asking a question after the first negative growth in the GDP of -0.6%. They are asking [if] we are likely to see more losses in jobs?

“Well, on the 26th of August we are releasing our GDP and we will see then if there has been losses of jobs,” he said