How will a second wave affect manufacturing recovery in SA?

South Africa's manufacturing sector is facing a mixed bag of challenges and opportunities as we navigate through the impact of the second wave of the COVID-19 pandemic. The sector experienced a decline in November 2020, with production sliding by 3.5 per cent year on year. Despite this, there are signs of hope as some sub-sectors are showing signs of recovery and returning to pre-pandemic levels. However, with the second wave causing uncertainty and potential spillover effects from trade partners, the road ahead remains uncertain. Miyelani Maluleke, Economist at ABSA Corporate & Investment Banking, sheds light on the headwinds and opportunities that lie ahead for the manufacturing sector in South Africa. As we delve deeper into the narrative, it becomes clear that the sector's performance in the coming months will be closely tied to various factors such as commodity prices, terms of trade, and the government's infrastructure spending drive. Let's explore the key points raised in the interview. Maluleke highlights that despite the challenges posed by the second wave, there are opportunities for the manufacturing sector in South Africa. Commodity prices and terms of trade have remained robust, offering a glimmer of hope for the sector. However, unresolved policy issues and the uncertainty surrounding the infrastructure spending drive present downside risks. The government's infrastructure spending drive was seen as a potential solution to boost economic growth in South Africa. However, the recent lockdown measures and fiscal constraints raise questions about the scale and feasibility of the plan. The lack of clarity on funding sources and limited fiscal space pose challenges to the implementation of the infrastructure drive. Given the need for continued fiscal support to businesses and households, the realization of the infrastructure plan remains uncertain. In conclusion, the manufacturing sector in South Africa is at a critical juncture as it navigates through the challenges posed by the second wave of the pandemic. While there are opportunities for growth, uncertainties loom large, requiring strategic planning and adaptive measures to ensure resilience and sustainability in the sector.