The squeeze tightens

01 July 2015 - 08:27 By Bianca Capazorio and Penwell Dlamini

South Africans are starting to feel the full effects of load-shedding and the rising petrol price. Statistics released yesterday paint a gloomy picture of the financial health of the industrial sector and a widespread loss of white-collar jobs.According to the Stats SA quarterly statistics, load-shedding and fuel costs were responsible for the biggest drop in turnover since 2010 in seven of South Africa's eight key industries.The statistics for the first three months of the year show turnover for the eight industries dropped 5.2%, from R2-trillion in the previous quarter to R1.9-trillion.Only personal services, which cover aspects such as private medical care, saw an increase in turnover, of 2.8%, on the final quarter of last year. Mining, manufacturing, electricity, construction, trade, transport and business services all recorded drops.South Africa has lost 44000 white-collar jobs since the beginning of the year.Jobs were lost in trade, community services, mining and quarrying, construction and business services, Stats SA said.The manager of private sector statistics at Stats SA, Krisseelan Govinden, said the impact of load-shedding could also be seen in the mining and manufacturing industries, as production levels fell. They recorded turnover decreases of 6.5% and 28% respectively.He said the transport industry, in which turnover declined 8.7% since late last year, had been hit by fluctuating fuel prices.Raymond Parsons, a professor at the North West University Business School, said: "The latest Stats SA surveys on turnover and employment are further economic evidence that the economy continues to perform well below par and confirms the extent to which the electricity crisis has harmed economic growth and employment."Parsons believes South Africa will be lucky to reach a growth rate of 2% this year, let alone optimistic forecasts of well in excess of 2% made earlier in the year."We cannot create enough jobs on this basis. The challenge is not a lack of growth policies but a failure to implement them on a sufficiently large scale to build business and investor confidence."We now need leadership in good growthmanship. Both the government and the private sector need to rally behind agreed infrastructural projects and other NDP programmes that will turn the negative economic trends around and put the economy on a much higher growth path," Parsons said.Economist Clive Ramathibela-Smith warned that businesses, in particular new ones, had to adapt to the changing environment, which was predominantly dictated by big conglomerates. The principle was to adapt, adopt or die, he said."When you adopt it means that you are taking responsibility for decisions you make [as owner of the business]. When you adapt it is when you conform to the current situation and take advantage of it. A lot of black businesses in various sectors have adapted," said Ramathibela-Smith.To add to South Africans' economic woes, from today e-tolls are a reality, municipal water and lights bills will go up and petrol costs more than an extra 40c a litre.Water will cost on average 14% more in Ekurhuleni, Tshwane and Johannesburg. The average electricity increase in the three cities will be 15%.Property rates rise by 8% in Tshwane, 7.5% in Ekurhuleni and 6% in Johannesburg.Motorists nationwide must cough up 44c a litre more for 93 octane petrol and 41c a litre for 95.In Gauteng, the first phase of the controversial new e-toll dispensation comes into effect. The monthly cap for light vehicles is R225 for Sanral account holders."We remind road users that all aspects of the new dispensation will take place over the next 18 months," Sanral spokesman Vusi Mona said in a government website report.He added that the road agency was working with the Department of Transport on administrative and legal processes to implement the new dispensation and close any loopholes.Additional reporting BDLive and RDM News Wire..

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