BIZ BRIEFS
Outages damage
Load-shedding is taking its toll on old municipal infrastructure. Johannesburg’s City Power has warned that the effects are “financially and operationally costly”.
“We have inherited an infrastructure that was not regularly maintained, with the backlog standing at R175-billion,” spokesperson Isaac Mangena says. The network takes extreme strain because of the massive “load-shifting and insurge”, which increases the likelihood of faults and can prolong power cuts.
Criminals are taking advantage of load-shedding and stealing cables. Employees are overstretched and constantly on standby. The city will only be able to quantify the effects once Eskom’s issues are resolved, he says.
Building low
There is no relief ahead for the construction sector. Building confidence reached an almost eight-year low in quarter one of 2019. The decline was mainly underpinned by declines in building activity.
First National Bank and the Bureau for Economic Research’s building confidence index dropped further in quarter one of 2019 to 25 from 32 in quarter four of 2018.
Out of the six subsectors, only architects and quantity surveyors registered higher confidence. The lowest confidence was registered by manufacturers and hardware retailers, who saw a contraction of 24 and 23 respectively.
Amcu setback
The labour court has given Sibanyestillwater the right to extend a wage agreement to the Association of Mineworkers and Construction Union (Amcu) at its operations.
On Wednesday, Sibanye said it had received the judgment, which declares that the extension of the gold wage agreement reached with the National Union of Mineworkers, UASA and Solidarity to Amcu and other nonunionised employees is “valid and lawful” in terms of the Labour Relations Act. In November, Amcu went on strike, demanding a R1 000-a-month increase. The other unions agreed on a three-year wage agreement, which stipulated a R700 a month increase in the first two years and R825 a month in the final year.
The company said it would “commence and participate with an independent verification process, to confirm the various unions’ level of representivity required to implement the extension agreement”.
Investment decline
Gross fixed capital formation, a measure of corporate and state investment in fixed assets, continued to decline for the fourth consecutive quarter in 2018.
The South African Reserve Bank’s latest quarterly bulletin said real gross fixed capital fell by 2.5% in quarter four of 2018 following a contraction of 0.7% in the third quarter. The annual figure contracted by 1.4% in 2018 from a marginal increase of 1% in 2017.
The ratio of capital formation to gross domestic product declined to 18.2% in 2018, which is the lowest level since 2005 and well below the 23.5% of 10 years ago.
“Capital investment in South
Africa was constrained by, among other factors, low business confidence, regulatory uncertainty in the mining sector, in particular, electricity-supply disruptions, subdued economic growth, and concerns about fiscal sustainability,” the Reserve Bank said.