Media Report - Essay Example

Media Report [N a m e] This article briefs about the current economic scenario in South Africa and its connection with the foreign economic forces and trends. South African economy is a mixed economy as 15% of the country’s overall economy comprises of the manufacturing sector. This sector offers 13% of formal non-agricultural employment. In South Africa, solely the manufacturing sector is mounting quickly than expected; yet it seems to be fruitless in boosting the GDP, because the country’s economy is surrounded by global economic flux.

Let’s see what facts and figures say about SA economic conditions: From 2010-2011, the production curbed during the period, April-June and July-Sept. The slothful impacts of economy suppressed the production in Oct 2011, leaving the manufacturing sector’s output 1.2%. Concurrent data shows that the output for November, 2011 reached 2.6% which is not only higher than expected but also higher than what was projected by Bloomberg consensus forecast, i.e. 1.3%. Month to month production from Oct-Nov 2011, in the manufacturing sector, increased 2.9% (Isa). The divisions that contributed most to this increase in production were: 1.

Food and beverages division 2. Wood and wood products, paper, publishing and printing division 3. Basic iron and steel The overall GDP of the country has not increased much despite the production uplift, because the production in the following divisions decline: 1. Motor vehicles, parts and accessories and other transport equipment division. 2. Furniture and other manufacturing division. 3. Petroleum, chemical products, rubber and plastic products division. The negative growth of the above divisions of manufacturing sector abridged the overall output generated by the rest divisions of manufacturing sector.

This data and figures indicate that the final quarter, i.e. Oct-Dec 2011, might has shown better progress in alleviating the sluggish economy trends of SA. Despite the output augmented beyond expectations, the GDP’s growth in the global economy is still debatable to many economists. In the light of economists’ statements in the report, analysis has been made and the interpretations are made about this media report. According to Economist Jeffrey Schultz, the uplift of the manufacturing output is a good sign and indicates acceleration of manufacturing sector of South Africa.

OECD’s CLI indicators point towards the decline in the global economic activity including China and Euro zone, except for Japan, US and Russia. Economist Nicky Weimar commented that the manufacturing figures of SA are submissive and are not strong enough to play a substantial role in uplifting the economy as the demand is expected to decline due to slump in Euro zone. This would affect the exports’ base of SA and so it has negative implications for local investors, employers and consumers as well (Isa).

However the PMI, Purchasing Managers’ Index of South Africa surfaces hope as it expects a modest growth in the manufacturing sector in the following year. Economist Shireen Darmalingam has commented that the manufacturing sector of South Africa is flourishing more rapidly than the remaining sectors, however, the overall economy has to face the uncontrollable global economic threats which could potentially decelerate the South African economic growth (Isa). The report identifies several reasons on the basis of which one would agree that the manufacturing output solely could not uplift the GDP outlook of SA.

The reasons are: 1. Many manufacturing divisions’ negative production offsetting the overall output, i.e. affecting GDP. 2. The economic activity is slowing down all over the world as identified by the OECD, so I agree that the economic downturn in Europe will have negative impact on the business activity of SA. This will decrease the demand of SA goods and also the foreign income. In spite of these facts, the development in the manufacturing sector cannot be neglected as it has taken the SA economy out of the declining trend of the preceding year.

In short, the economic growth is long term process of all short term economic activities, for uplifting the GDP the country first has to focus its domestic production across all division and sectors of economy, then at the same time it has to address the potential global economic threats and devise appropriate strategies to tackle them. Work Cited Isa, Mariam. “‘Bigger’ rise in SA factory output lifts GDP outlook.” Business Day. Jan. 2012. 15 Jan. 2012.