Chairman Speech 2022 Productivity Statistics

Productivity SA chairman, Prof Mthunzi Mdwaba’s, speech at the occasion of productivity SA national productivity statistics launch on 28 October 2022

Programme Director, Productivity SA Senior Manager, CIS, Conrad Sebego
The Chief Executive Officer of Productivity SA: Mr Mothunye Mothiba
Chief Economist at Productivity SA, Dr Leroi Raputsoane
Economics and Financial Markets Analyst, Advocate Lavan Gopaul
Representatives of Organised Labour; Union Federations and Union Members
Representatives of Business and Members of the Business Community.
Representatives of Government and State-Owned Entities.
My fellow Productivity SA Board members.
The Executive Management and Productivity SA staff;
Members of the media;
All stakeholders
Ladies and gentlemen

Molweni, Good morning, Dumelang, Sanibonani, Goeie more

Thank you all for taking time to join us this morning as we not only launch the 2022 Productivity Statistics but also have our last awareness event before the end of Productivity month on Monday next week. The month of October as you now all probably know marks Productivity Month in South Africa. Productivity Month was first launched over almost two decades ago by Productivity SA and the DEL. The aim of Productivity Month is to elevate the importance of productivity and inculcate a culture of competitiveness in every South African and demonstrate the positive changes that can be brought about through productivity improvement. During Productivity month, the significance of productivity as a driver of competitiveness and a fundamental bedrock for sustainable growth and job creation is brought to the fore through a series of campaigns, workshops, seminars, the National Productivity Awards, which we successfully hosted last week and hope you were part of that spectacular event where we got to see Productivity in action through the recognition of the companies that have succeeded against all odds through the implementation of productivity interventions by Productivity SA.

The launch of the Productivity Statistics fortuitously comes at a time when all eyes are fixed on the economy. Just 2 days ago, Finance Minister Enoch Godongwana tabled his midterm budget speech in parliament.

In his speech the minister reminded us of President Nelson Mandela’s words that:

“Democracy will have little content, and indeed, will be short lived if we cannot address our socio-economic problems within an expanding and growing economy.”
He emphasised the government’s goal to reduce poverty, inequality, and unemployment, in pursuit of a better life for all. That goal is aligned with our mandate and the critical work that we do here at Productivity SA.

We are gathered here this morning to analyse the performance of our Productivity levels because for our country to achieve growth in all spheres, it is vital for all of us to understand its productivity landscape. The launch of the Productivity Statistics seeks to provide yet another platform to enable the country to gauge its productivity performance and focus on continuous improvement.

The theme for the event is: “Production efficiency improves on economic recovery following the supply chain disruptions on Covid 19 pandemic”

Although the Chief Economist of Productivity SA, Dr Leroi Raputsoane will provide a comprehensive analysis of the statistics, it is encouraging that the current year’s Productivity Statistics indicate a bounce in economic growth post the onset of the Covid 19 pandemic.

Productivity SA generates the Productivity Statistics Report as an annual statistical publication of productivity trends and is designed as a reference document for everyone interested in the economic sector and industry productivity trends. The annual productivity measurement initiative is in accordance with the strategic objectives of its key stakeholders, which include government, business and labour.

The Productivity Statistics report provides an assessment by Productivity SA of national productivity issues, as reflected by the performances of the various industrial sectors. The detailed productivity measurement report also highlights the overall impact of productivity changes on sustainability and competitiveness of companies within the economic sectors of South Africa. The launch of these statistics should empower us to understand the levels of our productivity to enable us to improve.

To generate the Productivity statistics, Productivity SA collects data from two official sources, Statistics South Africa, and the South African Reserve Bank. The productivity indices are then calculated using the data collected from these sources. The collected data comprises Real output, Capital input, Labour input as well as Compensation of employees. The data is used to calculate indices such as Capital labour ratio, Capital productivity, Labour productivity, multi-factor productivity, Compensation per employee as well as Unit labour cost. These indices are calculated for the total economy, the three main sectors of the economy, the ten main industries as well as the eight selected manufacturing sub-sectors.

The stats are important oin so many levels. The information gathered helps:

• Government, Business, Workers, Researchers, Organisations and Associations as well as the public to assess the performance of the economy.
• Assess the economy’s ability to efficiently combine production inputs to produce outputs of goods and services and hence the contribution of the economy to the welfare and well-being of the nation.
• Government and policymakers to determine appropriate policy interventions on productivity and competitiveness.
• Business enterprises to track changes in business performance, production costs, as well as the efficiency of production inputs and Labour federations, use the statistics to negotiate wages.
• Give a representation of the cost competitiveness of domestic firms and hence their ability to compete internationally.
• An increase in productivity is usually matched by an increase in wages hence higher incomes to spend on goods and services which results in an improvement in the living standards of the Nation.

Well, some news that most of us did not miss is that there will be an increase in public servant’s wages. Though the 3% proposed wage increase is 7% below the 10% wage increase proposed by labour unions, that increase speaks to the productivity status of our country.

South Africa’s Economy has under-perfomed for many years, several long standing structural impediments continue to hamper growth. These include things like Unreliable Electricity supply, weak State capacity, crime and corruption, the suppression of emergence and growth of small businesses as well as costly and inefficient ports and rail network. But given all those challenges, it was refreshing to note that while tabling his mid-term budget on Wednesday, minister Godongwana hinted some positive plans to help alleviate poverty.

The question is, are the proposed interventions adequate to take us to where we want to go?

There is of course an urgent need for all of us to come up with collective solutions. This is our responsibility as patriots, and we need all hands-on deck! I hope the 2022 Productivity Statistics Report will be a valuable tool that empowers government, business, and labour to appraise themselves about South Africa’s productivity levels and move from an informed premise when making key economic reforms and decisions. It is also our hope that this launch will inspire us to have meaningful dialogue and work together to make a difference. It is our wish that, in the spirit of our organisation 2022 theme, “Adapting and growing stronger together”, we put our heads together and find solutions towards improving South Africa’s productivity and competitiveness.

To use a quote one of our board members shared with us recently by Henry Ford, “Coming together is a beginning. Keeping together is progress. Working together is success.”

Wishing you all a Happy Productivity Month!

Let the Productivity movement grow from strength to strength.

Thank you.
Chairman of Productivity SA Board