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SASSDA survey lights the way for possible industry upturn

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John Tarboton, Executive Director, SASSDA John Tarboton, Executive Director, SASSDA

Predictions that 2016 would be another tough year for the stainless steel industry may be less accurate than originally thought. This after the last three Southern Africa Stainless Steel Development Association (SASSDA) Short Track Surveys revealed an overall average improvement in market statistics.

John Tarboton, Executive Director, Sassda confirms that in the latest survey (October 2016), 38% of the 89 SASSDA member respondents indicated a positive response to the current order situation, although this is a slight deterioration on last month’s 40%.

“The improvement in sentiment of our members is also encouraging as 33% of SASSDA respondents see their current business situation as positive, albeit slightly down from September’s 36%.

“So while the year started off pessimistically, we now have systematic survey data from our members, who deal with customers and orders on a daily basis, indicating that business has improved. Our worst months were April, May, June and July of this year but we are hoping that the industry has now bottomed out and we are seeing a gradual recovery.”

With this generally more optimistic outlook, Tarboton sees potential for growth stemming from the prospect of increasing per person consumption levels, as well as local supply and imports for stainless steel going into local fabrication markets.

Looking at the broader performance of the industry over 2016, Tarboton says it’s clear that the stainless steel sector is resilient. For example, in 2015 when the global stainless steel production dropped by 0.7%, South Africa stainless steel consumption stayed at the same level as 2014.

However, a significant shift has arisen in 2016, when comparing data for the first eight months to the first eight months of 2015, the primary product supply into the local market was 6% down. The primary product supply into the local market for the last 12 months was 1.7% down on the previous 12 months.

SASSDA members also report that agro-processing, food and beverage, and the pharmaceutical sectors are showing the most promise with regards to consumption. Unfortunately, challenges remain for the manufacturing industry including the ongoing issues of high administered price increases, electricity tariffs, and labour instability.

To counter the lack of growth in the South African economy, SASSDA is facilitating members’ exposure to a range of African opportunities and together with the Department of Trade and Industry (DTI) and Team Export South Africa (TESA), is exploring several partnership projects that include cross-border training and project development initiatives in other African markets.

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