Business Cycle Term 3

Sectors in which Business Activities Fall

  • Mining and quarrying: Extraction of natural minerals (gold, coal, iron and diamond). Mining was the first industrial sector for South Africa the whole economy has evolved around mining.
  • Agriculture, Forestry and Fishing: Farming is needed to make foods (wheat, maize, meat, fruit and vegetables). Forests and oceans give forest and fishing idustries what they need to succeed.
  • Manufacturing: Production of goods in factories (foods, beverages, textiles and clothing, wood and paper, metal and its equipment, machinery and electrical goods).
  • Electricity,gas and water: Government gives the infrastructure and services that is provided for the citizeens and businesses in South Africa.
  • Construction: (houses, roads, bridges, factories, office blocks and shopping malls).
  • Finance: Government taxation and spending is also included in the economic interactions of the country. What the government gives to the GDP can be simplified: Transfers: Money from one sector is given to another, Consumption: Paying salaries and other reoccuring liabilities that help government to continue, Investment: Government builds new infrastructure.
  • Wholesale, retail and motor trade, catering and accomodation: Shops, resturants, hotels that consumers make use of everyday. 
  • Transport and Communications: Movement of goods and people throughout country by rail, road and air. Communications include Telkom and other cellular operators.
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The Primary Sector

The cultivation and extraction of natural resources from the earth or sea then converting it to raw materials that other idustries use. Raw and unprocessed resources to secondary and tetiary sectors for them to make it into a finish product.

  • Mining: South Africa has 10% of the world gold and 40% of identified resources. Mining is about 30% of South Africas resources (iron ore, diamonds, gold, coal, uranium and copper).
  • Farming: Agriculture is less than 3% of the GDP. Foreign exchange happens in fruit industry largest amount exported (wine, citrus, grapes, sugar, apples, pears and quinces). Types include: wool industry, dairy industry, meat industry, wheat industry.
  • Forestry: Mpumalanga, Kwa-Zulu Natal and Eastern Cape. This industry exports 9% of manufactured goods. Raw materials are used for pulp mining, paper manufacturing, saw milling and woodchip exports. Half milion people rely on industry to make a living. Types of businesses; Timber and paper industries.
  • Fishing: SA fishing industry employes 28 000 people directly/indirectly. Gives about R4-5 billion to GDP. Types of fishing: hake trawling, line fishing for snoek and cob and crustsacean sector rock lobster, pink prawns,red carbs and shrimp.
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Types of labour skills needed in primary sector

  • Unskilled labour- May have secondary education but may not have any special training. Physical labour that handles simple tasks (fruit pickers, fishermen, milkers and miners).
  • Semi-skilled labour- Have a secondary education and some skills but cannot do any specialised work (driver, machine operator, sheep shearer and butcher).
  • Skilled labour- Secondary and tertiary education. Have specialised knowledge, skill or training (mine supervisior, farmer, plantation manager, managers in specific businesses).
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The Secondary Sector

Processs raw materials from the primary sector. The industries are called manufacturing industries. Examples are electricity generation and water provision and the construction industry. Industrial sector (construction) gives 17% to GDP. It is a link for the primary sector (raw minerals extracted) and tertiary sector (products sold).  Manufacturing businesses: 

  • Dairy: Clover, Dairybelle 
  • Bread producers and bakeries: Sasko
  • Canned fruit and vegetables: Koo, All Gold
  • Paper manufacturers: Mondi, Sappi
  • Stationery manufactuerers: Trefoil, BIC 
  • Iron and steel producers: Mittal Steel

Eskom: Not tangible product it is a vital resource for all homes and businesses. More generators have been bought to try and keep up work flow during power interruptions. 

Joburg Water: Supply clean bulk to SA. The government need to provide the infrastructure because of the majority of it. Household and businesses get charged for water and electricity to manicipal bill or they use prepaid.

Construction: Civil Engineering Companies (Group 5) and Construction Companies (Fraquaharson  Construction). Semi-skilled workers (bricklayers, tilling and building skills) Plumbing and electrical work are sub- contractors to the construction industry. The businesses can be large or single owned


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Types of labour skills needed in secondary sector

  • Unskilled labour- Examples factory workers, no judgement or skill required, packagers or production line workers
  • Semi-skilled labour- Examples machine operators, bakers, seamstresses, factory supervisors
  • Skilled labour- Examples fashion designer, car designer, electrical engineer, accountant, plumber, human resource manager, marketing executive.
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The Tertiary Sector

Largest contributor to country's GDP

  • Wholesalers: Buy in bulk from manufacturer (primary and secondary sectors) to sell to retailers (Pick n Pay and Spar). Wholesalers can trade immeadiately with the public (Jumbo Cash n Carry) 
  • Retailers: Buy in bulk from wholesalers and sell in smaller numbers to the consumers. (Spaza shops, Woolworths, Truworths, @Home). Wholesale and retail (traders)
  • Agents: People work from home selling products on behalf of a company (Tupperware, Avon).
  • Motor trade: Give vehicles  to consumers and businesses (Eagle Ford, Waterford Land Rover).
  • Catering and Accomodation: These businesses give consumers a place to relax and get food on the go (fast-food outlets, youth hostels, catering companies and guesthouses).
  • Financial services: Banks and mortgage bond orignators (ABSA,Capitec Bank and SA Home Loans).
  • Insurance: Short-term (homes, vechiles and buildings) need to pay a premium (Dial Direct, Mutual and Federal and Auto and General). Long term (annuities, pensions, medical aid) (Liberty Life, Old Mutual, Discovery Health and Fedhealth). Reinsurance companies and insurance brokers also fall under this sector.
  • Real estate: (Seeff and Pam Golding) services to buy and sell household and industrial property.
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The Tertiary Sector continued

  • Personal and business services: Plumbers, electricians, garden services, hairdressers, beauticians, extra academic lessons. South Africa gives entrepreneurs the oppertunity to bring their product to the market.
  • Government services: Public school and university, public hospitals and social welfare, police force, justice by legal system. These services are all possible by the taxes SARS collects.
  • Transport and communication: This is needed to inform people of products exsistance. Workers use transport to get to their place of work (trucking companies, railways, shipping companies, airlines , removal companies and petrol stations) Storage and warehouses are included. Information technology give hardware and software services helping work flow in company. SABC, Multichoice, Prime Media give entertainment, education and employment to people. Telkom Neotel Vodacom and MTN are important for the world of comunication.
  • Unskilled- Sales assistant, bank teller, cash register operator, tea lady and packer.
  • Semi-skilled- Driver, administrative assistant, switchboard operator
  • Skilled labour- Plumber, electrican, hairdresser, chef, teacher, insurance broker, software developer.
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