Strikes are harming the economy, says SACCI boss

25 August 2011

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25 August 2011 | Angeline Albert

The CEO of the South African Chamber ofCommerce and Industry (SACCI) has criticised ongoing strike action in the country, warning of the damage it is causing to the economy.

Members of the South African Municipal Workers'Union (SAMWU) are currently on strike, demanding wage increases but protests have also involved rubbish being spilled onto the streets of some cities and towns.

“SACCI condemns the behaviour that has occurred in others such as the trashing of streets in Cape Town, Durban, Mokopani and Nelspruit. SACCI is concerned at the cost of such action,” he said.

It follows the publication of SACCI’s latest trade survey that revealed the strikes had contributed to deteriorating trading conditions in the country. According to July’s Trade Activity Index (TAI) - which measures sales, new orders, supplier deliveries, inventory and employment – there was a severe contraction in activity compared with the previous month. The index recorded a figure of 38, down from 47 in June. A figure below 50 is negative.

“The strike season had a sobering effect on employment conditions. With performance in the trade environment deteriorating severely, it is not able to afford above-inflation wage increases,” said a statement. “The claims by labour in the business environment are likely to severely dampen employment prospects in this sector as well. The potential implications for employment in the broader economy is concerning.”

The TAI has been below 50 since April. The volume of new orders slipped from 43 in June to 33 in July. The SACCI said rising costs such as fuel are also putting margins under continual pressure. Sales and employment also declined when compared with the previous month.

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