Metal sector strike cost economy dearly

2014-12-08 12:34

The month-long strike in the metal sector knocked back the third-quarter growth rate of the South African economy by more than half of what it could have been, says the South African Reserve Bank.

In its latest Quarterly Bulletin, the bank said the annualised real economic growth rate picked up to 1.4% in the third quarter of 2014, as the effects of the five-month-long platinum strike in the first half of the year started to dissipate.

However, this strike was followed by industrial action in the steel and engineering sub-sector of manufacturing.

“This lasted one month, involved 220 000 employees, and contributed to the manufacturing sector registering a third successive quarter of negative real growth.”

It also spilled over to the real output of the electricity-producing sector, which contracted for a second successive quarter.

“Taking account of the direct and indirect effects, it is estimated that in the absence of the industrial action in the manufacturing sector, the growth rate of the overall economy in the third quarter would have been 3.1%.”

The bank said the slow growth was likely to affect tax revenues.

“The continued sluggish economic growth bodes ill for the trajectory of government tax revenue, the fiscal deficit and government debt.”

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