South African manufacturing performance in international perspective 1970-1999

Abstract

In this paper we analyse the historical performance of the South African manufacturing sector in an international context. Industry specific currency converters are constructed to estimate the labour productivity gap in comparison with the USA. Subsequently, these results are used to compute relative unit labour costs, in order to examine the international competitiveness of the South African manufacturing sector at a detailed level. The results obtained in this paper can be of help in devising industrial policy because they give an indication which sectors are performing well and which are falling behind. The paper is structured as follows: First the industry-of-origin approach, the methodology to construct unit value ratios for South Africa relative to the USA, is explained and applied. Next, the unit value ratios are applied to estimate comparative labour productivity levels for total manufacturing and 13 manufacturing branches, for the period 1970-1999. Besides the USA, we also compare South African labour productivity with several other countries to put our results in a broader international perspective. Section 3 deals with the international competitiveness of South African manufacturing. Relative unit labour costs are given vis-a-vis the USA. Finally, we end with a conclusion.

Publication
South African Journal of Economics, 71(1), pp. 119–142