Steel & Engineering Industries Federation of South Africa in annual report has warned that South Africa’s Metals & Engineering sector, which is used as a measure of the overall economy’s performance, is expected to contract 2.2% in 2023 as the sector grapples with a toxic combination of load-shedding, dismal service delivery and a depressed global economic environment. To place this figure in context, production for the sector increased by 1.6% in 2022, although the sectors gross domestic product contracted by 6.5% in the same year. SEIFSA Chief Operating Officer Mr Tafadzwa Chibanguza describes the current global environment as extremely challenging. He said “Inflation emanated as one of the most significant global headwinds in 2022, with the conflict in Ukraine and China's slowdown, from the perspective of the country being the world's factory, feeding inflationary pressures. Central banks around the world have had to adopt a much more aggressive stance to fight the stubbornly high inflation, and the implications of the monetary policy are starting to bite and will shape the economic fortunes for the year. A global economic slowdown is expected, tighter financing conditions have exposed fiscally vulnerable emerging markets, all of which represent markets for the M&E Sector which exports 38.2% of output, with half of the exports going into Africa. Local headwinds, primarily the energy crisis, only serve to compound the already inhospitable environment. The sectors to which the M&E Sector supplies domestically, namely construction, automotive, mining and petrochemicals have all indicated a difficult year ahead, with the energy crisis being a chief contributor.” The report also highlights the key reform programmes and policies needed to drive the sector's performance, which is closely tied to economic activity and underpinned by prevailing economic fundamentals.