SETP No. 14 The Economic Value of Incremental Employment in the ...

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Summary and conclusions 5.33 This chapter takes the results from Chapter 4 and applies them to the national input output relationships. From this we determine the multiplied impact of changing expenditure patterns. This is done for nationally, provincially and for male and female headed households respectively. 5.34 The focus is on poor and very poor households. For example, if household income increased for those people with between R1 to R5,000 a year such that their income increased to between R5,000 and R10,000 a year (and there was a spending increase of R5,000) then, there would be an increase in GDP equal 1.40 times this increase, indirect household incomes would increase by 0.65 times this, 0.26 indirect jobs would be created, there would be increases in income tax, company tax and imports to the value of R605, R307 and R1,280 respectively. 5.35 At low income levels the recorded multipliers increase as income increase. Technically the cause is because of the different composition of expenditure at different income levels. The multiplier effects cannot measure any informal sector activity and regard all expenditure as formal. In reality much of the expenditure changes will be, initially at least, through the informal sector. In consequence we would expect higher indirect income and job multipliers than are being reported. 5.36 There are no startling differences between male and female headed households or between the various provinces. 43
6 The Macro Economic Impact of the Local Manufacture of Construction Equipment 6.1 The objective of this chapter is to determine the macro economic impact of the local production of construction machinery. 6.2 Bell Equipment, based in Richards Bay KwaZulu Natal, is a local manufacturer of construction equipment. Bell Equipment had, in principle, agreed to discuss the research project and assess their role in the investigation. Unfortunately, given the competitive nature of the industry, there was less enthusiasm once the degree of disclosure became clear. Other industry players such as Bateman Earth Moving Equipment, Barlows (Caterpillar) and Komatsu were approached with a similar lack of success. 6.3 Because of the above constraints the investigation focussed on one form of road construction equipment – the wheeled loader. This particular piece of equipment was selected as it is one of the most important areas where we are able to substitute labour and machines in road construction, on the one hand, and because it is an important locally made machine, on the other. Description of Methodology 6.4 In the first instance the methodology is the identical to that applied in Section 5. The constituent capital parts of wheeled loaders were disaggregated into key components. These components were in turn reallocated to SIC code. The potential range of import component was estimated. Finally, using input output multipliers, the macro economic impact of the local production of a wheeled loader was estimated. The model calculated the corresponding direct, indirect, induced and total economic effects for each imported content scenario. 6.5 The model assumes that no local macro economic benefit is derived from an imported component. For example if tyres were imported, the rand value for tyres in the input spreadsheet was entered as zero, thereby nullifying any effects that a change in demand for tyres would have on the tyre manufacturing industry and on the South African economy as a whole. Data 6.6 To accomplish the revised research objectives it was necessary to establish: • The cost of wheeled loaders similar to those manufactured by Bell Equipment. • An estimate of the cost breakdown of the above wheeled loaders i.e. the contribution of the various components to the total cost of a wheeled loader. • An estimate of the probability of a particular component being imported. 6.7 Table 6.1 provides some key information on price and bucket capacity of a selection of wheeled loaders that are available in South Africa. Three makes of wheeled loader are reported in the table – Komatsu, Caterpillar and Bell. These range in size from 10 ton machines, to 13 ton machines and finally to the colossal 44
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SETP No. 14 The Economic Value of I
Page 3 and 4:
Copyright © International Labour O
Page 6 and 7:
Table of Contents PREFACE .........
Page 8: List of Abbreviations CBPWP GDP ILO
Page 12 and 13: Structure of the Report This report
Page 14: 8. It is shown in the forth area of
Page 17 and 18: 1.8 In order to achieve this object
Page 19 and 20: 3 A Labour Focussed Profile of the
Page 21 and 22: Figure 3-2 Employment in the Constr
Page 23 and 24: construction. Real wages are higher
Page 25 and 26: Table 3-3 Construction industry Ave
Page 27 and 28: Figure 3-7 1997 October Household S
Page 29 and 30: 3.23 There are four possible reason
Page 31 and 32: Figure 3-8 Number of persons by inc
Page 33 and 34: 3.35 Estimates of average provincia
Page 35 and 36: 3.41 Table 3.11 reports on the prov
Page 37 and 38: 3.45 An attempt was made to verify
Page 39 and 40: Summary 3.50 The construction indus
Page 41 and 42: A profile of income and expenditure
Page 43 and 44: Figure 4-1 Percentage of expenditur
Page 45 and 46: Table 4-3 Expenditure increases for
Page 47 and 48: Table 4-5 Expenditure increases for
Page 49 and 50: 4.18 Here we find that grain mill p
Page 51 and 52: • Labour and capital are in unlim
Page 53 and 54: Figure 5-1 Schematics of the Mechan
Page 55 and 56: slightly higher additional income a
Page 57: Table 5-9 Indirect job creation Num
Page 61 and 62: Standard Industrial Classification
Page 63 and 64: Table 6-6 Macro economic impact of
Page 65 and 66: Figure 7-2 Cost of Gravel Road Cons
Page 67 and 68: • When adverse soil or other cond
Page 69 and 70: Table 7-5 Capital cost amortisation
Page 71 and 72: Table 7-8 Local and Import costs of
Page 73 and 74: • In the first five years of oper
Page 75 and 76: 7.41 Table 7.4 is sourced from Tabl
Page 77 and 78: 8.10 Second, the analysis did not t
Page 79 and 80: References Bulmer-Thomas, V. (1982)
Page 81 and 82: practical feasibility alone, labour
Page 83 and 84: domestic industry to set against th
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