Engineering News reports that according to the Steel and Engineering Industries Federation of Southern Africa (Seifsa), companies in the metals and engineering sector have seen production decline by 34.2% over the past year, with production in the sector estimated to contract by 5.3% this year.

Seifsa undertook a loadshedding impact survey of its members to measure the impact of the energy crisis on them between February 2022 and February this year. Employment in the sector has mirrored the production trends, contracting by 1.1% over the year and contributing to the country’s unemployment crisis. “The employment losses over the period indicate some very concerning trends, although these losses are mostly attributable to companies responding to the energy crisis over the year period,” Seifsa indicated. Specifically, one-quarter of companies indicated that they had had to reduce headcount in response to the electricity crisis, some by as much as one-quarter of their employment, equating to 9,432 people. One-third of the respondents indicated that they were working short-time owing to the electricity crisis. “An even more concerning outcome is the fact that half of the companies that are implementing short-time have already reduced headcount. We assign the status of vulnerable to these companies because, while the other half of companies have not reduced headcount, short-time is a good leading indicator to track for potential future job losses,” Seifsa highlighted. Furthermore, 42.6% of the companies that responded have cancelled investment and/or expansion plans, owing to the uncertainty presented by the electricity crisis.

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