SA economy braced for strike fallout

[miningmx.com] – THE recent strikes in the mining industry will have a devastating impact on the broader economy in the coming months.

Mineworkers in particular, but also those in other lower income groups, will be hit hard in the fourth quarter and early next year.

“Prolonged strikes in the mining industry generally have a greater impact on the economy than, for example, strikes in the public service,’ says Professor Carel van Aardt, head of the Bureau of Market Research.

The mining industry interacts with and is linked to other sectors, producers, manufacturers and even retailers much more closely than the public service. Therefore the strikes will have a fairly severe impact on the broader economy.

Mines are already suffering from low commodity prices and input cost pressures for electricity and labour. They were severely disrupted by the strikes, but have had problems with capital projects and productivity for quite some time already.

“A large number of mineworkers will lose their jobs, but the decline in economic activity will also affect workers in other industries,’ Van Aardt says.