SA’s productivity improves

16 October 2007

South Africa’s productivity has improved from just 0.6% of annual growth between 1989 and 1995 to an annual growth of 3% between 1996 and 2005, a shift that Productivity SA attributes to the significant macroeconomic reform and trade liberalisation the country has undergone.

Formerly knows as the National Productivity Institute over the past 30 years, Productivity SA released its latest national productivity statistics following a comprehensive analysis of the country’s performance over the past nine years.

The statistics, which were released at the start of October – declared to be Productivity Month – also show that South Africa’s real economic output has grown by 3.9% over the same period.

The figure also show that the country is further shifting toward being a service economy, with the tertiary sector being the strongest performer over the nine years. These include transport, storage and communication; finance and insurance; and wholesale and retail trade.

The services sector is the biggest in South Africa currently, employing some 3.2-million people in 2005.

Addressing the media in Midrand, north of Johannesburg, Productivity SA chairperson Kobus Laubscher said it was important to target a 7% multifactor productivity growth rate across all sectors of the economy by 2011, if a 6% economic growth rate is to be reached.

“We acknowledge that as the only institution dedicated to the concept of productivity in South Africa, it is our responsibility to lead the way in this regard,” Laubscher said.

Efficiency Group senior economist Dawie Roodt said nothing was more important than economic growth, but reiterated that this was not done by creating jobs, but by creating wealth in an economy.

“From 1994 onwards, the new South Africa has been good for economic growth,” he said, adding however that more needs to be done in terms of education and skills development in the country. He said that with only 13% of matriculants taking maths and science on higher grade, it could lead to a shortage of skilled workers in the future.

He noted that there seemed to be a sharp correlation between productivity growth and competition, explaining that Telkom and South African Airways were just some of the companies being protected from the free market, thereby not placing productivity under scrutiny.

However, the increased productivity did not necessarily result in more jobs being created, with Roodt pointing out that most of the main sectors improved productivity by employing less labour. However, productivity improved and jobs were created in finance, insurance, real estate, business services, trade and accommodation services.

Source: BuaNews