All doom and gloom for South Africa? Maybe not…

With the widening skills gap posing an increasingly bigger problem for an economy largely based on production via means of human labour, the international trend toward the use of powerful cloud-based tool solutions and software such as mobile phone applications – that can remotely control virtually every aspect of the production process – we find ourselves poised between a curious conundrum: job creation, or efficiency and economies of scale?

What does the future hold for South Africa?
Load shedding has become a very real problem we all have to deal with on a daily basis. It becomes an even bigger issue when it is totally unpredictable, such as where our offices are based. Adding further frustration to matters is when planned schedules aren’t adhered to. It’s no wonder many CEO’s believe the general public isn’t getting the full picture of the current national power crisis.

In fact, a Merchantec CEO Confidence Index report states that CEO confidence is down nearly 12% for Q2 in 2015. “The lack of information, transparency and government planning, together with the irregularity of power outages has made it increasingly difficult for CEO’s to plan for the long term,” the report states. “The ongoing power crisis is a major contributor to the fairly grim outlook of CEO’s in South Africa demonstrated by a drop in confidence in the basic resources, industrials, financial, consumer goods and technology sectors,” it continued. In relation to CEO confidence and the current economic conditions, compared to six months ago, confidence dropped by a substantial 20.8%, and 82% of CEO’s believe load shedding will continue for at least another two years.

So where to from here, and what does the future hold? Without being too philosophical, if we had the answers, we wouldn’t be asking these questions. But let’s look on the bright side, however irregular that may be at the moment.

Garth Strachan, deputy director-general of the Department of Trade and Industry, announced early in June that the automotive production and development programme (APDP) – one that supports motor industry growth locally – is being “tweaked” to achieve sturdier localisation and give more emphasis to supplier development. Be sure to read about Mercedes Benz South Africa’s success – having just produced their one millionth passenger vehicle at the East London plant recently. Weco’s rock solid dependability carries yet another success story into the future, with heavy investment into not just local production, but their staff too. The same can be said for Morgan Advanced Materials, whose aim of increasing their product mix and to aid import replacement speaks directly to what government is looking to achieve to aid in the local production sectors. Additionally, Allied Steelrode have spent over R150 million on a new facility and equipment that is going to benefit the downstream processors.

So it would appear we are getting on with things, as we always seem to do in South Africa.