Metals sector is geared to real economic activity and fundamentals

The year 2022, was characterised by intense global headwinds in the form of stubbornly high inflation, rising interest rates, disruption to important supply chains.

Domestic rigidities including the energy crisis, deteriorating local government service delivery, the volatile political landscape which has dire consequences on business confidence have all served to compound the headwinds.  

These headwinds have for the most part spilt over into 2023, and more importantly their implications are starting to manifest, setting up the year ahead to be a difficult one on the economic front.

The performance of the metals and engineering sector, which is highly geared to real economic activity, is underpinned by the prevailing economic fundamentals.
Lower global economic growth means less supportive external export demand and the lack of infrastructure spend domestically also presents constrained demand domestically.

This does not bode well for a sector that has contracted by 1.6% on a compound annual basis since the peak of 2008.