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South African economy needs manufacturing in order to grow: Research

South African economy needs manufacturing in order to grow: Research

CAPE TOWN: The economy needs the manufacturing sector to grow, research commissioned by the Manufacturing Circle shows.

Historical data demonstrate there is a strong correlation between the growth in gross domestic product and manufacturing output over four decades spanning 1974-2014. Manufacturing Circle executive director Coenraad Bezuidenhout said the research highlighted the importance of more alignment between policymakers and the private sector on ways to keep manufacturing resilient and create a positive policy environment to promote its growth.

“Given manufacturing’s strong multiplier effects it is certain that once such alignment is addressed we will see manufacturing pull ahead to drive growth trends in the country, rather than merely mirroring them,” Mr Bezuidenhout said. He emphasised the alignment of government interventions to boost manufacturing was needed across government and did not only apply to the Department of Trade and Industry.

Mr Bezuidenhout said local procurement had to be aligned as there were more than 2,000 procurement points across different departments, spheres and state-owned entities of government.