Lacking Dynamism
The ‘Dynamic Market Index 2016’ report, recently released by the Gordon Institute of Business Science, categorises South Africa as a “static market” – a market that has a relatively high base in terms of having an enabling business environment, but one that is currently lacking dynamism.
South Africa is not alone, with nearly 30% of the 144 countries measured falling into this category, including Brazil, a fellow Brics (Brazil, Russia, India, China and South Africa) member.
The index assesses the performance of a country in six areas: socioeconomic stability; its justice system; macroeconomic management; cutting red tape; improving openness and connectedness; and human capital development.
The top four performers, admittedly off low bases, were all from Africa – Sierra Leone, Rwanda, Lesotho and Côte d’Ivoire. South Africa’s performance, by contrast, was “lacklustre”, which the authors attributed to the country’s poor performance in dealing with red tape, as well as to weak growth, “questionable economic decisions” and a “tumbling” currency.
Sadly, this lack of dynamism is also reflected in the 2016 edition of the Real Economy Yearbook, with most of the industrial and mining sectors covered feeling the pinch. Nevertheless, there are pockets of promise, with this edition providing a balanced assessment of the risks, and some of the real opportunities in sectors of the economy. Such opportunities are available in the industrial – automotive, construction, electricity, road and rail, steel and water – and mining – coal, gold, iron-ore and platinum – sectors.
The yearbook has also been expanded to include a dedicated section on South Africa's pumps industry, which provides an overview of local demand, manufacturing and supply, imports and exports, availability of materials and skills, and a brief overview of the global market.
This publication aims to make a contribution, however modest, to building a platform for greater economic dynamism in the second half of 2016 and into 2017.
These sectors do not only feature in this edition of Creamer Media’s Real Economy Yearbook, but as separate briefs under the banner Real Economy Insight.
This report is a summary of information published in Engineering News and Mining Weekly, as well as of information available in the public domain. The report does not purport to provide analysis of market trends.