South African Manufacturing sector

Rise of South African Manufacturing sector

The South African manufacturing sector emerged at a time when new investment in Gold was practically non-existent; the initial Gold investment had absorbed most of the capital and technical expertise available in South Africa, however, post 1911 much of this capital and expertise was freed up. The Gold market had also created a relatively large internal market which was sustained, to a large extent, by imports. The stage was thus set for South Africa to shift its development to manufacturing, whereby producers could take full advantage of the opportunities for profitable import substitution. By the mid 60's South African manufacturing was at an all time high accounting for both the MVA and the GDP growth rates peaking, real term GDP growth rates would not reach the same level until 3 decades had passed. By the early 70's the South African manufacturing sector was relatively mature and diversified, with manufacturing exports accounting for as much as 31.4%

Gross domestic product growth in the advanced econ...

manufacture bar led stool,colorful led stool

Between Manufactures and Electricity Buildings

in 1972.

Decline of South African manufacturing sector

The commodity price boom of the 70's was one of the key downfalls to the manufacturing sector. Real exchange rates resulted in a substantial deterioration in the international competitiveness of the more downstream products such as; fabricated metal products, machinery, electrical machinery, motor vehicles and other transportation equipment. The slow down in the world economy was also a factor in the declining manufacturing sector resulting in falling levels of output. Structural problems further hampered the potential for economic growth resulting in large misallocations of scarce resources and wasteful infrastructural development. The imposition of trade and investment sanctions further exacerbated the declining infrastructure sector finally resulting in the "debt standstill" of '85 in which South Africa was forced to become a net exporter to repay...