Tag: growth

The increasing migration of flexible office space and co-working locations to areas outside of major metropolitan cities globally is creating a ‘flex economy’ that could contribute more than R3.8 trillion to global local economies in the next decade, according to the first comprehensive socio-economic study of second-city and suburban workspaces. It also revealed that in South Africa, on average 265 new jobs are created in communities that contain a flexible workspace, with an extra R30.8 million per workspace going directly into the local economy.

This rise in local working is being largely driven by big companies adopting flexible working policies; moving away from relying on a single, central HQ and increasingly basing employees outside of the major metropolitan hubs in flex spaces. Most are doing so to improve employee wellbeing by allowing their people to work closer to home, and also to save money and boost productivity.

Jobs creation and the ‘sandwich economy’

Across the 19 countries analysed, the average individual workspace sustains 218 jobs. This includes temporary jobs created during the fitting-out stage of the office space, permanent jobs to run the office, including reception, maintenance, cleaning etc., plus the jobs associated with the occupancy of the workspace.

Economic impact

As well as direct job creation, flexible workspaces benefit the local area through an uplift in Gross Value Added (GVA), the measure of the value of goods and services produced in an area.

For the greater good

Aside from the direct financial impact, local office space has been found to benefit workers and local regions in other, societal ways.

The next 10 years

As well as assessing the impact of individual centres, Regus also looked at the estimated potential of each market to host a larger, national portfolio of local flexible workspaces.

Mark Dixon, CEO for Regus’ parent company IWG, said: “When people commute into major cities their wallets commute with them. Working locally keeps that spending power closer to home. What this study shows is that providing more opportunities for people to work closer to home can have a tremendous effect, not just on them, but on their local area too.”

Black Friday sales expected to soar in SA

Source: African News Network

South African business have begun preparing for what looks to be another bumper Black Friday trading day, with sales predicted to be up 30% from last year, online largest payment service provider PayGate said.

South Africa has like several other countries adopted “Black Friday”, the informal name for the day after Thanksgiving in the United States which marks the beginning of the Christmas shopping season. This year, it will fall on November 29.

Data from retail tracker Black Friday Global shows interest in Black Friday deals in South Africa has grown by 9,900 percent over the past five years, PayGate said in a statement on Tuesday.

“PayGate’s tracking of payments for Black Friday, meanwhile, shows the number of transactions doubling every year for the past three years, and payment clearing house BankservAfrica says it saw a 55 percent growth in transactions in 2018 compared to the previous year,” it said.

“PayGate expects 2019 Black Friday transactions to grow by 30 percent this year.”

It however said South Africa’s e-commerce growth was generally coming off a very low base, having really taken off only in the past three years or so.

The company said it had processes some 64 percent of Black Friday transactions last year, and expected this to rise to as much as 70 percent in 2019.

South African business have begun preparing for what looks to be another bumper Black Friday trading day, with sales predicted to be up 30 percent from last year, online largest payment service provider PayGate said on Tuesday.

By Charlotte Mathews for MiningMx 

The under-performance of Eskom’s fleet of coal-fired power stations is currently being concealed by falling demand. Even a 0.1% uptick in GDP growth would result in a resumption of load-shedding, Nelisiwe Magubane, chairperson of Matleng Energy Solutions and a member of the Eskom board, said on Wednesday.

Nelisiwe said Eskom was reviewing its system availability. The previous energy availability factor report of a few months ago predicted 75-80%. At this point availability was 69-70%.

Mike Rossouw, CEO of Independent Energy Thought Leader and a former chairman of the Energy Intensive Users Group, said if demand picked up, South Africa would experience loadshedding twice a day.

Magubane and Rossouw were speaking at the Afriforesight Future of Coals & Bulk Commodities Conference in Sandton.

Rossouw said the root of the problem facing Eskom was that its pricing policy was wrong. It was devised when Eskom was stable and smaller and not building new power stations. “Today it is the worst medicine for Eskom. The good news is that it can be changed overnight, without parliamentary processes, and things will start improving,” he said.

He said price and demand were inextricably linked. About 75% of Eskom’s income was derived from industry and mining, who were paying too much for power. A comparison of South Africa’s industrial and mining tariffs (rather than its average price) with the same sectors globally showed Eskom’s prices were far higher.

For some smelters, 60% of costs are electricity. At the moment 47 South African smelters were shut. Several South African mines were now smelting offshore because they could get better prices elsewhere.

As Eskom increased its tariff, demand for electricity was falling. As a result, Eskom did not have the revenue to pay for its current scale of operations, which were 500% bigger than they were in 2001 measured in number of plants, Rossouw said. The tariff allowed Eskom by the regulator should reward the utility for good behaviour and punish it for bad behaviour.

Rossouw said Eskom’s average price should not be more than 90c/kilowatt hour (kWh), and ideally it should be about 80c/kWh. Eskom has some power stations that can produce at 30-35c/kWh, but others were generating at a cost of 90c/kWh.

A price of 80c/kWh presupposed that Eskom could bring costs under control. “It makes no sense to raise prices because costs are not under control,” he said.

Rossouw said Eskom’s high costs resulted from three main factors. Firstly, it was paying excessive costs for coal as a result of too many small operators supplying bad coal intermittently and destroying road infrastructure at the same time. “(Former Eskom CEO Brian) Molefe’s ‘I don’t want the bakery I just want the bread mantra’ is nonsense,” Rossouw said, because coal and power stations were inextricable.

A second problem was that Eskom had too many assets. Breakdowns were now 20% of capacity from 3% in 2001 and fixing breakdowns required three times as many resources as planned work.

The third problem, Rossouw said, was staff and other costs. Eskom could address those costs, if it was allowed to do so. It should not be stopped from retrenching. “Every company in the world that is in trouble cuts back operations and staff,” he said.

By Mark Sweney for The Guardian

The internet is about to lose its mantle as the fastest-growing sector of the global advertising market for the first time in two decades, as brands seeking risk-free space to spend their ad budgets turn to traditional media such as cinema, billboards and poster sites.

Next year the global internet advertising market, which is dominated by Google and Facebook, will surrender its position as the fastest-growing ad medium for the first time since the early days of the dotcom boom and bust at the turn of the century.

Internet advertising is forecast to grow by 10% globally next year, the lowest level since 2001, according to research by the global media agency group Zenith. The shrinking growth rate means that cinema advertising, which is forecast to surge more than 12% next year, will become the fastest-growing ad medium.

Major companies have expressed their concerns over digital scandals – such as Cambridge Analytica, “fake news” and ads appearing next to inappropriate YouTube videos such as extremist material – putting pressure on internet platforms.

The movie industry is experiencing a golden age, with UK attendance last year hitting its highest level since 1970 and global box office records being smashed, and advertisers are looking to cash in.

Investment in technology, from the special effects used in blockbuster movies to the plush experience of cinemas sporting leather reclining seats, sofas and restaurant menus, has fuelled a renaissance despite the proliferation of streaming services such as Netflix.

“From Wonder Woman to the Avengers, Black Panther or The Favourite you have such as diverse range of films with a captive audience that advertisers know they can get a specific message to,” said Tim Richards, the founder and chief executive of the international cinema chain Vue.

“What we are also seeing is that companies are getting tired of bombarding the internet with messages when they can’t be sure who is seeing them. Audiences have a higher level of trust and confidence on what they see on the big screen than something that may have been thrown at them on the internet.”

While the growth rate of internet advertising was always eventually going to slow with scale – in 2020 it will account for half of the $650bn (£520bn) spent on advertising globally – there are signs of a wider shift in the market. This month, the British competition watchdog launched a probe into the £13bn UK digital ad market.

The outdoor advertising sector – which includes billboards, the sides of buses and railway stations – is also expected to grow at a healthy 5% globally in 2020, bucking a downturn in ad spending on other media including newspapers and TV.

“Outdoor advertising is now very much a digital experience, it’s pixels not paste any more, and that’s attractive to brands,” said Phil Hall, the incoming co-managing director of media company Ocean Outdoor.

“But you also can’t ignore the issue of brand safety. Given the well-publicised issues faced by some of the digital giants outdoor advertising has a great pitch to advertisers about being a trusted haven for brands.”

Zenith’s report says that while much of the growth in internet advertising comes from small, local businesses that spend all their budgets on platforms such as Google and Facebook, the majority of big brands still prefer to spend most of their advertising money on traditional media.

Is the adult colouring book craze dead?

By Adam Rowe for Forbes

In 2015, adult colouring books became the dark horse of the publishing industry, as a surprising surge in sales boosted major players’ revenues. In 2016, there was no end in sight. In 2017, the bottom fell out of the adult colouring book market and, this year, the trend is officially dead.

So it seems, at least. It’s possible that adults still enjoying colouring as much as ever, but independent publishers — whose sales numbers aren’t reported with the same rigour as those of traditional publishers — have cornered the market. Here’s a dive into the timeline of the adult colouring trend, as told through the cottage industry of articles covering the phenomenon.

A July 2015 New Yorker article described the early stage of the adult colouring renaissance, noting a connection to the popularity of other infantilising activities like adult summer camps and adult preschool. The trend was picking up, even if the numbers hadn’t come out yet: Dover decreed August 2, 2015, as the first National Colouring Book Day, and Bantam Books and George R.R. Martin teamed up on a Game of Thrones-themed colouring book. In December, Business Insider profiled a self-publishing colouring book creator who had earned $329,000 in Amazon royalties in 2015 alone, by selling her books via Createspace — noting that colouring books were at the time holding five out of the top 10 spots on Amazon’s hourly-updated bestsellers list.

The colouring book sales spike continued across 2016, to much media attention as numbers came to light: Nielsen Bookscan estimated 12 million colouring books sold in 2015, up from a paltry one million the year before. The hot takes were entertaining: America’s obsession was a cry for help, while studies showed colouring exercises reduced symptoms of depression and anxiety. Retailers doubled down on art supplies and colouring books. The Canadian company Newbourne Media LP released a music CD/colouring book combination product. Adult nonfiction books across the industry sold 12% better in the first half of 2016 than the same period in 2015, and Publishers Weekly credited colouring books.

In 2017 the cracks began to show. Barnes and Nobles’ third-quarter profits, released in March 2017, revealed sales were under expectations, though still strong, and the decline in colouring book (as well as Adele album) sales was responsible for “nearly one-third of the sales decline.” By August, the trend was declared dead.

But did interest in adult colouring books really wane, or was it diverted away from traditional publishers and towards the retailer to rule all retailers, Amazon? The evidence lies in a slide from a 2016 presentation by Author Earnings, one of the more authoritative analysts in the murky world of book data. A chart breaking down online book sales by genre shows that about 60% of crafts/hobbies/games books in 2016 were being sold by non-traditional publishers (indie self-publishers as well as Amazon imprints). That’s a huge percentage, second only to the formidable romance genre, and it indicates that in 2016, the year that Barnes and Noble’s third-quarter colouring book profits began levelling off, most online craft book sales went to Amazon and self-publishers.

In other words, book publishers might have lost their colouring book market share to the same retail giant who endangered their industry in the first place.

Author Earnings hasn’t offered comparable data in 2017 or 2018, and major industry databanks like Bookscan don’t track Amazon’s data, so it’s impossible to say for sure whether the colouring book craze is really over or whether faster-adapting colouring book self-publishers have used Amazon as a channel to scoop up the majority of what was once traditional publishers’ cash cow. But as publishers turn to the digital audiobook as the next popular format (sales are up 32.1% in Q1 2018!), they should be wary of Amazon’s growing interest in audiobooks.

MTN loses nearly 2-million subscribers

Source: eNCA

MTN lost almost two-million subscribers in South Africa in the six months to June and service revenue growth slowed by 3.3 percent in a stubbornly weak economy.

MTN, Africa’s telecoms giant, said it had 1.9 million less local subscribers compared to December, bringing the total subscribers to 29.2 million in the period under review, as price-sensitive consumers opted for cheaper data offerings.

It has 1.1 million fewer active data subscribers, although postpaid customers increased marginally by 0.1 percent to 5.6 million.

MTN chief executive Rob Shuter said that the 1GB promotion had contributed to the decline.

“We had our famous 1GB promotion, which we decided was not generating value and we pulled it out of the market. A lot of those SIMs have since become dormant and contributed to the drop in prepaid users,” he said.

Shuter said delayed payments under the network roaming agreement with Cell C resulted in a R393-million impairment.

“We are evaluating a sustainable solution to the agreement with Cell C,” Shuter said.

The domestic prepaid service revenue declined 5.5 percent on the introduction of out of data bundle rates and regulations by the Independent Communications Authority of South Africa (Icasa).

Commenting on the recent release of the policy on high-demand spectrum and policy direction on the licensing of a Wireless Open Access Network, Shuter said it was a move in the right direction, and lacked detail.

“We are still not clear how much spectrum will be available to mobile operators,” said Shuter.

Overall the MTN group had strong subscriber growth of 7.7 million in the first six months of the year to reach a total of 240 million subscribers.

What unemployment looks like in South Africa

South Africa’s unemployment rate is getting worse. The latest stats from Stats SA, as well as the opinions of leading economic and labour experts, paint a very dire picture:

  • The unemployment rate increased by 1,4 percentage points from 27,6% in the first quarter of 2019 to 29,0% in the second quarter of 2019
  • The number of people unemployed grew by 455 000
  • The number of people employed grew by just 21 000
  • Government’s failed Industrial Policy Action Plan (IPAP) was supposed to create 350 000 manufacturing jobs
  • 320 000 manufacturing jobs have been lost since 2008
  • Gang violence on the Cape Flats is a direct result of the loss of jobs in the textile industry in the areas
  • 6,7-million people are currently unemployed in South Africa – the size of the entire country of Bulgaria

By Josh Hall for Prolific London

Retail sales rose by just 0.3 per cent in July, their lowest level since records began.

The figure was down significantly on the 1.6 per cent increase seen in the same month in 2018, and follows what was also the worst June on record.

The survey, conducted by the British Retail Consortium and KPMG, are based on responses from retailers making up an estimated 40 per cent of all British retail sales. Their records began in 1995.

According to the Consortium, “the combination of slow wage growth and Brexit uncertainty” are to blame for the collapse.

But the group also said that last year’s figures had been inflated by the World Cup.

KPMG head of retail Paul Martin said: “Shoppers are notably disengaged overall. The pressure continues to build between online and physical offerings, costs continue to rise and the demands of consumers continue to grow.”

Meanwhile as we reported yesterday the UK service sector recorded a slight and unexpected growth during July.

The performance put it out of kilter with other UK sectors, in which the outlook remains gloomy.

According to a Business Tech article published recently, chief economist at Efficient Group, Dawie Roodt believes that state spending has increased relentlessly since 2009, at a time when tax collections collapsed – and that the South African economy “doesn’t have a long time”.

“Even if we can somehow wave a magic wand and get rid of all the corruption and incompetence in the state and SOEs overnight, the perilous condition of the state’s finances will need an extraordinary attempt to save us from further economic collapse,” Roodt was cited as saying.

South Africa’s faltering economy can be attributed to:

  • Eskom’s dire financial results, with a record reported loss of R20.7-billion
  • The potential for load-shedding making a return in late August
  • The latest unemployment data: the Quarterly Labour Force Survey for Q2 2019 showed that the unemployment rate increased by 1.4 percentage points from 27.6% in the first quarter of 2019 to 29% in the second quarter of 2019
  • Rumours that international ratings agency Moody’s could downgrade South Africa’s sovereign debt to junk status abound
  • A collapse of fiscal accounts
  • Lack of economic growth – it needs to be at 6%

There are a few ways to remedy this, including:

  • Increasing taxes, such as VAT, by 11 percentage points will get in approximately R250-billion
  • Cutting state spending by a similar amount, and do away with cash-heavy initiatives like the NHI

By Smithers Pira for The Gapp News

The latest research from Smithers Pira investigates what the future holds for digital and analogue print equipment market over the next five years. In 2018, the global market for new print equipment sales had a value of $19.77 billion. This market grew (at constant prices) from $19.91 billion in 2013 to $20.10 billion in 2017 before falling back to its 2018 level; equivalent to a -0.3 per cent year-on-year decline for the 2013-2018 period. The annual print equipment market is forecast to show minimal growth in value at 0.1 per cent, a compound annual growth rate (CAGR) for 2018 to 2023, to reach $19.92 billion in its final year.

At the same time, the market will see a transformation, with real demand growth confined to inkjet sales and certain formats of sheetfed offset litho. This is happening in response to profound and ongoing change in demand for print, and equipment manufacturers are compelled innovate to secure sales in an increasingly competitive market. These trends and their impact on future demand for over 25 types of commercial printer are tracked and quantified in the recent Smithers report.

Market evolution
The printing industry is undergoing a series of major changes. Sales of newspapers and magazines, a traditional and important segment for print equipment, have fallen dramatically in many parts of the world in face of 24-hour digital access to news and information via computers, tablets and smartphones.

Rising demand for packaged goods means that packaging and label printing are two of the few growth sectors in print demand. Original equipment manufacturers (OEMs) are looking to capitalise this with new dedicated press formats – especially in inkjet – and extending capabilities on existing platforms to handle packaging substrates. Within packaging, and other end-use applications, print buyers are demanding shorter average print runs, and ever quicker delivery times.

OEMs of both analogue and digital print equipment are reacting to the changing market dynamics with improvements to their presses. For analogue processes, this has largely been to make them more agile and efficient to deal with a larger number of print jobs of shorter runs per day. For digital, developments have been focused on improving print quality to match analogue processes, and on increasing print line speeds.

Analogue
Faced with reductions in average print runs of up to 50 per cent in some cases, analogue printers are demanding intensive technological developments. High levels of automation at all stages of the print process have allowed print service providers (PSPs) to make major reductions in makeready times and give them greater control and monitoring of the print run to improve quality standards. Cumulatively these improvements have enhanced the flexibility of the print equipment to make PSPs to run a larger number of shorter print runs during a working shift cost-effectively.

The widespread use of computer-to-plate (CTP) processes has been a key factor in reducing prepress times. The process has been used for offset litho for more than 15 years, and it is rapidly gaining ground in flexo prepress. CTP also provides improved reproduction quality so that PSPs can offer better service to customers. The incorporation of digital workflow systems and the use of on-line spectrophotometers and pattern recognitions systems to constantly monitor quality during the print run have improved the efficiency of print lines and reduced running costs, as well as reducing reject rates and generation of waste.

Offset litho
The analogue process that has seen the biggest number of improvements in recent years is sheetfed offset litho. Innovations by the leading Western and Japanese manufacturers have transformed the technology, to a great extent.

Besides the improvements detailed above, print line run speeds have been increased and processes been optimised for short print runs. Computer-integrated manufacture systems are being used to preset the presses with files from prepress, and with simultaneous plate changing and washing cycles make-ready times can be reduced to under 10 minutes – less than three minutes for the same substrate and format. Sheedfed offset litho printers are increasingly carrying out simultaneous printing of groups of jobs by setting them up side-by-side across a large-format press.

Offset litho is also seeing a boost from orders received via the online web-to-print sector. The segment is also benefitting from a new demand for higher productivity very-large format (VLF) litho presses. As new installations of B1-B3 presses decline, Smithers’s analysis tracks how annual sales of VLF machines will more than double across 2017-2023.

Flexo
In flexography, an important additional development has been in the use of sleeves to simplify the process of mounting the printing plates onto the flexo press, reducing make-ready times. This has eliminated the need for printers to prepare and store the multiple, non-interchangeable cylinders required for several jobs, reducing the costs for cylinders and for their storage.

The segment is also innovating through cooperation with inkjet press and printhead developers. This is seeing a new generation of hybrid presses that combine flexo’s efficiency for big solid area colours with the variable data potential of inkjet, integrated with existing flexo finishing lines.

Gravure
Manufacturers of gravure presses have introduced automated trolley changeover processes for cylinders and inking systems on the latest generation of equipment, making them more flexible and enabling quicker turnaround times between jobs.

Digital
Technology developments of the two digital print techniques, electrophotography (toner) and inkjet, have been taking place for many years. Naturally suited to short-run commissions, these are enabling these processes to be used for a wider range of commercial and industrial printing applications. The main focus in digital printing in 2019 is on:

• Improving print quality to more closely match the best of the analogue processes
• Increasing print speeds to extend use to longer print runs.

Electrophotography
Electrophotography will continue to see improvements in colour printing quality to match, or exceed, that achievable by offset printing. The potential for increasing the speed of toner machines is limited however by the multi-stage print technique. This will see sales of new electrophotography equipment fall across the Smithers forecast period as genuine growth concentrates on inkjet. In response many toner OEMs are looking to diversify into this alternative digital process.

Inkjet
Across the print industry R&D spending is highest in inkjet. This investment is being witnesses in improvements in quality and reliability of the equipment, reducing printers’ total costs. New inkjet presses can print at faster speeds to give better productivity, and new workflow solutions and more automation of material handling is improving productivity of lower speed presses.

New sales of inkjet press are being driven by the introduction of high-performance inkjet machines, in packaging with machines directly targeted at corrugated, folding cartons, flexible and rigid plastics, and even metal print. As well as labels, there is a developing application in cost-effective production of short to medium runs of mono and full-colour books, often via e-commerce ordering.

A major trend is for digital print lines to integrate with postpress finishing systems, to take full advantage of the automated operation of the print process. This is more prevalent with inkjet lines as integrated finishing limits flexibility of a toner line. As the number of digital print lines grows at the expense of analogue printing, the use of in-line finishing for those end-use applications with good workflow streams will reduce the number of near/off-line postpress operations in print shops.

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