Labour productivity inches up in South Africa during difficult year
Productivity SA yesterday, 5 October 2010, released productivity statistics for 2009 detailing the performance of key industrial sectors of the South African economy. According to the report, there was a deceleration of average annual growth rate in Multifactor Productivity (MFD) in 2009, reflected in the performance of almost all Main Economy sectors.
The Main Economy sectors include construction, mining and quarrying, finance, insurance and real estate business, government services and agriculture, fishing and forestry, manufacturing, electricity, gas and water, retail trade and catering and accommodation.
Only four of the Main Economic sectors recorded positive average annual growth in Multi Factor Productivity (MFP) these are Agriculture, Forestry and Fishing (9.9% bin 2008 and 7.6% in 2009), Construction (5.4% in 2008 to 2.1 % in 2009), Finance, Insurance and Real Estate Business (7.2% in 2008 to 3% in 2009) and the General Government Services (-0.1% in 2008 to 0,0% in 2009). In the private economy (excluding government) there was a decline in MFP from 1.8% in 2008 to -04% in 2009.
Statistics are key
Michael Ade, chief economist at Productivity SA says the statistics are key in understating how an improvement in productivity in the private and public sectors could help spur the economy with benefits such as job creation. Ade says the challenge is to improve on our competitiveness position and ensure that the improvement translates to improved national productivity. "A few sectors of the economy have performed well during the recession in 2009 by filling a number of vacant posts", added Ade.
The report makes a comparison between the GDPs of South Africa and leading emerging markets such as the BRICM countries (Brazil, Russia, India and China and Mexico).
According to the report, in 2009 South Africa's annual real GDP growth rate declined by -1.8% in 2008 compared to a 3.7% GDP growth in 2008.
South Africa's 2009 GDP growth rate of -1.8% was greater than that of Russia, -7.9%, and Mexico, -6.5% but less than that of Brazil at -0.2%, India at 7.2% and China at 8.7%.
SA GDP growth rate compares favourably
South Africa's GDP growth rate compares favourably with comparators in emerging markets. The statistics get more interesting as we focus on our productivity performance as a country.
Key productivity performances included the growth rate of labour intake in the Private Economy which declined from 1.1% in 2008 to -1.5% in 2009. Labour productivity grew by 2.7% from 3.5% in 2008. A positive growth in capital input utilised in the mining and quarrying sector was realised with a growth rate of 5.6% in 2008 and 5.8 in 2009. This was accompanied by a fall in capital productivity from -7.9 to -11.5%.
The construction industry experienced an average annual increase in employment which led to a decrease of 4.3% in 2009. This was linked to the completion of projects related to the 2010 FIFA World Cup. However, labour productivity in the sector accelerated from 11.0% in 2008 to an impressive 13.6% in 2009.
The Finance, Insurance and Real Estate Business Sector saw an improvement from 3.8% in 2008 to 5, 6% in 2009. This was however accompanied by a decrease in employment of 1.0% in 2009 from 3.9% in 2008.
The Wearing and Apparel sub-sector of manufacturing registered the best MFP in both 2008 and 2009 with 14.4 and 11, 3 growth rates respectively.
The executive manager for Value Chains and Competitiveness, Sello Mosai, says as South Africa seeks solutions to unemployment, crime, income inequality, overcrowding and housing, improved productivity and efficiencies and quality and sustaining competitiveness could provide solution to some of these issues.
