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Assessing and Forecasting the Long-Term Impact of the Global Financial Crisis on Manufacturing Sales in South Africa

Author

Listed:
  • Tendai Makoni

    (Department of Mathematical Statistics and Actuarial Science, University of the Free State, Bloemfontein 9300, South Africa)

  • Delson Chikobvu

    (Department of Mathematical Statistics and Actuarial Science, University of the Free State, Bloemfontein 9300, South Africa)

Abstract

Sales forecasting is a crucial aspect of any successful manufacturing organisation as it provides the foundation for investment, employment development, and innovation. The Global Financial Crisis (GFC) had a negative impact on the manufacturing sector in South Africa (SA) and the rest of the world. The objective of this paper is to analyse the trend of manufacturing sales before, during, and after the GFC and to quantify the impact of the GFC on the total manufacturing sales in SA. The time-series-based Box–Jenkins methodology is used to achieve the objective. The study used Statistic South Africa’s data on monthly total manufacturing sales in SA from January 1998 to December 2022. Total manufacturing sales exhibit strong seasonality. The ACF, PACF, and EACF plots, as well as the AIC, BIC, RMSE, and MAE, suggest the SARIMA(2,1,2)(2,1,1) 12 model as the best model for explaining and forecasting manufacturing sales in SA. The SA manufacturing sector was negatively impacted by the GFC, as evidenced by the comparison between actual data and projections based on a historical path prior to the GFC. Manufacturing sales are recovering from the GFC but have not reached potential levels that could have been achieved without the crisis. The SA manufacturing sector may take time to reach the expected/projected sale levels that could have been achieved in the absence of the GFC.

Suggested Citation

  • Tendai Makoni & Delson Chikobvu, 2023. "Assessing and Forecasting the Long-Term Impact of the Global Financial Crisis on Manufacturing Sales in South Africa," Economies, MDPI, vol. 11(6), pages 1-17, May.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:6:p:158-:d:1159631
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    References listed on IDEAS

    as
    1. Manish Shukla & Sanjay Jharkharia, 2013. "Applicability of ARIMA Models in Wholesale Vegetable Market: An Investigation," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 6(3), pages 105-119, July.
    2. Hyndman, Rob J. & Khandakar, Yeasmin, 2008. "Automatic Time Series Forecasting: The forecast Package for R," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 27(i03).
    3. Apostolos Serletis, 2012. "Oil Price Uncertainty," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 8407, February.
    4. repec:ilo:ilowps:454101 is not listed on IDEAS
    5. Haroon Bhorat & Chris Rooney, 2017. "State Of Manufacturing In South Africa," Working Papers 201702, University of Cape Town, Development Policy Research Unit.
    Full references (including those not matched with items on IDEAS)

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