Lack Of Skills, Low Economic Growth And Saturated Markets Constraints To Investing In Metals And Engineering Sector

Johannesburg, 21 September 2018 – Lack of demand in the form of large infrastructure projects, expensive input costs, lack of skills required by the metals and engineering (M&E) sector as well as policy uncertainty, low economic growth, low returns on existing investment and a saturated domestic market are some of the factors identified as constraining investment in South Africa’s M&E sector.

Speaking at the Metals and Engineering Indaba taking place at the IDC Conference Centre, Southern African Institute of Steel Construction CEO Paolo Trinchero said other factors identified as barriers to investing in the sector include lack of trust between government, business and labour, lack of collaboration in pursing sustainable industry solutions and lack of innovation.

Echoing Mr Trinchero’s sentiments, Steel and Engineering Industries Federation of Southern Africa Chief Economist Michael Ade said there has, over the last decade, been a lack of both green and brown fields investment into the sector owing to low demand, among other factors.

He said, as a result, domestic producers were under pressure to shed jobs, which in turn lead to low productivity in the sector – this created a negative vicious cycle, which is bad for the economy.