The recent sharp decline in the rand is yet to filter through to the manufacturing sector, but new Manufacturing Circle executive director Philippa Rodseth is cautiously optimistic that the depreciation will result in increased exports in the coming months.
However, she warns that it cannot be seen as a “silver bullet”, noting, too, that a number of countries outside Europe and the US have faced similar currency depreciation, meaning that the domestic industry’s relative competitive position may not have changed as materially as would have been thought.
Nevertheless, the Manufacturing Circle, which has argued since its founding in 2008 that a competitive currency remains a key element of enhancing competitiveness, believes a “window of opportunity” may be opening on the export front.
With the December Purchasing Managers’ Index (PMI) showing continued weakness, Rodseth said a competitive currency was insufficient in itself to stimulate a revival in the sector’s fortunes.
“It’s not the silver bullet and it’s complicated further by the volatility of the rand, which makes planning extremely difficult,” Rodseth asserts.
“We believe there needs to be an integrated and holistic solution.”
