Economic 360 for South Africa: Growth Prospects and Emerging Opportunities in the Manufacturing Industry

Frost & Sullivan, July 2011, Pages: 102

South Africa is a democratic Republic with a stable political system. The economic environment is forecast to remain stable, with policy focus on employment creation through growth and stability. The manufacturing industry in South Africa is well established with strong development in the automotive, chemical, iron and food and beverages sectors. Internationally South Africa’s manufacturing competitiveness ranks relatively weak, due to structural bottlenecks and outdated machinery. The South African government has developed various investment and development schemes for the manufacturing industry and moderate growth is expected for the manufacturing industry from 2011 to 2014.

Research Overview
South Africa’s economy grew modestly since 2004 but has weathered the economic downturn well and is expected to post a gross domestic product (GDP) of 3 to 4 per cent from 2011 to 2014. The motor industry was the hardest hit during the downturn, declining by 27.3 per cent from 2008 to 2009; however, several industries are shaking off the effects of the slowdown and are emerging as the country’s biggest growth engines. Some of these are the manufacturing, finance, real estate and business services sectors. Although manufacturing production in South Africa also took a hit, it rebounded in 2010 and is expected to grow at a compound annual growth rate (CAGR) of 2.1 per cent from 2011 to 2014. Manufacturers were also bogged down by the rising energy prices, as they affected production volumes and business strategy. Nevertheless, the economy will be bolstered by the strengthening of the local manufacturing sector due to the Government’s commitment to development; relatively high portfolio inflows, stimulating the finance, real estate and business services sectors; and the recovery of the building and construction sector. The Government is also focusing on giving a leg up to the country’s struggling export sector. Fortunately, the high FDI has limited the effect of climbing trade deficits on the current account. South Africa’s largest export sectors are the metals and steel, motor vehicles and chemicals sectors, and these export industries are highly reliant on the country’s natural resources and industrial incentive programmes.

The political climate in South Africa is expected to be stable in the next six to seven years and will not hamper the economic growth. The Government has unified fiscal and monetary policy commitments to promote economic growth and reduce the high levels of unemployment, which has been one of the biggest hindrances to the economic revival. An analysis of the major trade partners reveals a shift in trade toward China as the major trading partner to South Africa. It also indicates a major change in the exports and imports composition. While the share of manufacturing exports is steadily increasing, the share of mining exports is declining. The reduction in the share of manufacturing imports indicates the strengthening of the manufacturing sector, enabling the industry to become more competitive and export-orientated. The manufacturing industry has been identified in the South African Government’s New Growth Path and 2011 National Budget as instrumental to growth and creating employment in the country. A second Industrial Policy Action Plan and various other government incentive schemes are in place to further aid development in the manufacturing sector.

Economic 360 for South Africa: Growth Prospects and Emerging Opportunities in the Manufacturing Industry is Frost & Sullivan’s Country Industry Forecast service, which provides vital inputs for evaluating the attractiveness of a country and its chemicals industry. Apart from enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research.

Benefits

The following benefits are offered by this research:

Identifying New Market Opportunities

The future trends and developments in the South African manufacturing industry have been identified by taking into consideration the economic environment of the country. The analysis will prove greatly informative to stakeholders in the industry.

Understand Future Industry Trends

This research service gives insights into the economic developments and trends in the manufacturing industry of South Africa. The economic climate, industry and infrastructure developments will give greater information about the dynamics of the market in the forecast period.

Comprehend Policy and Economic Environment

An analysis of the dynamics of economic growth in South Africa provides considerable insights into the economic parameters that will influence the industry. Industry performance is closely related to the level of economic growth and the structural dynamics of the economy are greatly helpful to industry participants.

Evaluate Industry Segment Potential

This study focuses on providing an analysis of country and industry trends and is informative to companies seeking to enter new geographic markets. The market and economic insights will also prove invaluable to corporate planners in the development of accurate business plans or the allocation of resources.

Executive summary
Political Analysis
Economic Analysis
Social Analysis
Technology Analysis
Legal Analysis
Environmental Analysis
Manufacturing Industry in South Africa

List of Figures

Economic 360 Perspective: Key Features of Political Structure (South Africa), 2010
Economic 360 Perspective: Current Political Regime (South Africa), 2010
Economic 360 Perspective : Key Political Trends (South Africa), 2010
Economic 360 Perspective: Description and Implications of the Government Agenda (South Africa), 2010
Economic 360 Perspective: Key Trade Partners and Foreign Relations (South Africa), 2010
Economic 360 Perspective: Infrastructure Development Indicators (South Africa), 2005-2008
Economic 360 Perspective: Development Indicators –ICT Sector (South Africa), 2005-2008
Economic 360 Perspective: Demographic Statistics (South Africa), 2010
Economic 360 Perspective: Number of Employed per Sector (South Africa), 2009
Economic 360 Perspective: Year-on-Year Change in Employment Per Sector (South Africa), 2009
Economic 360 Perspective: Statutory Protection for Intellectual Property (South Africa), 2010
Economic 360 Perspective: Statutes Governing LabourIssues (South Africa), 2010
Economic 360 Perspective: Key LabourLaw Indicators (South Africa), 2010
Economic 360 Perspective: Personal Income Tax Rates and Relief (South Africa), 2009-2011
Economic 360 Perspective: Key Environmental Issues and Challenges (South Africa), 2011-2014
Economic 360 Perspective: Key Environmental Indicators (South Africa), 2005, 2006 and 2007
Economic 360 Perspective: Key Environmental Agreements (South Africa), 2010
Manufacturing Industry: Global Manufacturing Competitiveness Index –Country Rank and Scores (World), 2010
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Automotive Industry (South Africa), 2011-2014
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Clothing and Textiles Industry (South Africa), 2011-2014
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Chemical Industry (South Africa), 2011-2014
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Agro Processing Industry (South Africa), 2011-2014
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Metals and Steel Industry (South Africa), 2011-2014
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Electronic Equipment Industry (South Africa), 2011-2014
Manufacturing Industry: Pharmaceutical Market Indicators (South Africa), 2007 and 2010
Manufacturing Industry: Growth Prospects and Emerging Opportunities in the Healthcare Industry (South Africa), 2011-2014

List of Charts
Economic 360 Perspective: Political Party Balance (South Africa), 2004 and 2009
Economic 360 Perspective: Key Trade Developments and Agreements (South Africa), 2010
Economic 360 Perspective: Allocation of Government Expenditure (South Africa), 2010
Economic 360 Perspective: Prime Interest and Inflation Rates (South Africa), August 2004-February 2011
Economic 360 Perspective: Inward FDI Flows (South Africa), 2004-2010
Economic 360 Perspective: Exchange Rate (South Africa), January 2004-April 2011
Economic 360 Perspective: GDP Growth and Contribution Per Sector (South Africa), 2004, 2009 and 2010
Economic 360 Perspective: Major Export Destinations (South Africa), 2004-2010
Economic 360 Perspective: Exports by Sector (South Africa), 2010
Economic 360 Perspective: Major Importing Countries (South Africa), 2004-2010
Economic 360 Perspective: Imports by Sector (South Africa), 2010
Economic 360 Perspective: Growth or Decline of the Relative Share of Exports (South Africa), 1992-2010
Economic 360 Perspective: Growth or Decline of the Relative Share of Imports (South Africa), 1992-2010
Economic 360 Perspective: Value of Imports, Exports and the Current Account (South Africa) 2004-2010
Economic 360 Perspective: Effects of the Recession (South Africa), 2000-2010
Economic 360 Perspective: Economic Outlook (South Africa), 2004-2014
Economic 360 Perspective: Population and Unemployment Rate (South Africa), 2004-2010
Economic 360 Perspective: Government Programmesfor Science and Technology (South Africa), 2010
Economic 360 Perspective: Per Cent Composition of R&D Spending (South Africa), 2008
Economic 360 Perspective: Sector Contribution to Total R&D Expenditure (South Africa), 2008
Economic 360 Perspective: Court Structure (South Africa), 2010
Manufacturing Industry: Sector Contribution to GDP (South Africa), 2004-2014
Manufacturing Industry: Sector Contribution to Sales in Total Manufacturing (South Africa), 2010
Manufacturing Industry: Manufacturing Sales Revenues (South Africa), 2004-2010
Manufacturing Industry: Under-utilisationof Capacity in Manufacturing (South Africa), 2004-2010
Manufacturing Industry: Manufacturing Export Shares (South Africa), 2010
Manufacturing Industry: Manufacturing Import Shares (South Africa), 2010
Manufacturing Industry: Location of IDZs (South Africa), 2010
Manufacturing Industry: Vehicle Production Numbers (South Africa), 2004-2014
Manufacturing Industry: Vehicle Export Numbers (South Africa), 2004-2014
Manufacturing Industry: Exports of Catalytic Converters (South Africa), 2004-2014
Manufacturing Industry: Clothing and Textiles Manufacturing Sales (South Africa), 2004-2010
Manufacturing Industry: Trade in Clothing and Textiles (South Africa), 2004-2010
Manufacturing Industry: Value of Chemical Manufacturing Sales (South Africa), 2004-2010
Manufacturing Industry: Chemical Industry Trade (South Africa), 2004-2014
Manufacturing Industry: Country Share of Chemical Exports (South Africa), 2010
Manufacturing Industry: Country Share of Chemical Imports (South Africa), 2010
Manufacturing Industry: Agro-processing Revenue (South Africa), 2004-2010
Manufacturing Industry: Agro-Processing Trade (South Africa), 2004-2010
Manufacturing Industry: Country Share of Agro-processing Imports (South Africa), 2010
Manufacturing Industry: Country Share of Agro-processing Exports (South Africa), 2010
Manufacturing Industry: Key Exports of Agro-processing Goods (South Africa), 2010
Manufacturing Industry: Key Imports of Agro-processing Goods (South Africa), 2010
Manufacturing Industry: Share of Sales to Industrial Groups (South Africa), 2010
Manufacturing Industry: Value of Manufacturing Sales for Metal and Steel Products (South Africa), 2004-2010
Manufacturing Industry: Share of Metals and Steel Exports (South Africa), 2010
Manufacturing Industry: Country Share of Metals and Steel Exports (South Africa), 2006-2010
Manufacturing Industry: Share of Metals and Steel Imports (South Africa), 2010
Manufacturing Industry: Country Share of Metals and Steel Imports (South Africa), 2006-2010
Manufacturing Industry: Manufacturing Sales Revenues for Electronic Equipment (South Africa), 2004-2010
Manufacturing Industry: Exports of Electronic Equipment (South Africa), 2006-2010
Manufacturing Industry: Imports of Electronic Equipment (South Africa), 2006-2010
Manufacturing Industry: Medical Devices Import Composition (South Africa), 2010
Manufacturing Industry: Medical Devices Export Composition (South Africa), 2010
Manufacturing Industry: Medical Devices Trade (South Africa), 2006-2010
Manufacturing Industry: Pharmaceutical Industry Trade (South Africa), 2006-2010

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