The impact of the steel industry on the labour force - the case of Emfuleni municipal area

Abstract

Steel is an important part of our everyday life almost visible in everything around us. If steel is not part of the product that we use, then steel was used in making the product or at least in transporting the product. Steel is a key ingredient in critical sectors of the economy such as construction, automotive and mining. The use of steel in any country is closely linked to its economy and serves as a barometer for economic development. The steel industry contributes significantly - both directly and indirectly to a country's economic development and industrialisation. The steel industry is also positioned as a major contributor to the country's Gross Domestic Product, an earner of foreign exchange, a vital supplier and a creator of employment. The steel industry in South Africa rates among the largest in the world, with South Africa producing approximately 60 percent of Africa's total steel. The major steel producing company in South Africa is found in Vanderbijlpark and Vereeniging in the Gauteng province within the Emfuleni region. The aim of this study was to investigate the impact of the steel industry on the labour force at the Emfuleni municipal area. Literature and theories of the steel industry, manufacturing, economic growth and employment were used to conduct the literature review. The study also applied a number of various econometric models and approaches such as OLS, cointegration, error correction and vector error correction approaches to examine the impact of the steel industry on labour force in the Emfuleni municipality. Additionally, other approaches such as the error correction model (ECM) and the Toda-Yamamoto Granger causality were also used in the study. The study then ends with a summary, conclusion and recommendations.