Report Coverage
This report on trends in the manufacturing sector in South Africa, which is concentrated in the food and beverages, metal, petrochemical and automotive industries, provides information on the size and state of the manufacturing sector including contribution to GDP, performance, employment, production, profitability, trade, tariffs and fixed investment. Major trends under discussion include: Manufacturing’s declining importance; electricity infrastructure and logistics constraints; illicit trade; decarbonisation and green manufacturing; automation, AI and robotics; localisation; and anti-dumping and tariffs. The report is one of several annual Who Owns Whom trends reports which identify major trends associated with various underlying industries.
Introduction
• South Africa’s manufacturing sector has declined in prominence over several decades.
• As in much of the rest of the world, manufacturing’s share of jobs and value-add has declined in recent years.
• This has led to concern that the country is deindustrialising.
• In several industries, it has become unsustainable to manufacture locally due to little local demand and other countries being able to make and export goods more cheaply.
• Energy and logistical constraints and the increasing price of electricity have affected the sector.
• The implementation of 30% tariffs in the US has significantly affected manufacturing exports to the US of vehicles, chemicals and metals.
• Major trends include sustainability and technological advancements.
Trends
• Food and beverages, vehicle manufacturing, and chemicals and plastics have increased their share of value-add and employment manufacturing.
• Government is initiating more anti-dumping probes.
• Imports have increased over the last three decades.
• Manufacturing companies are moving to smart factories using automation, robotics and AI to streamline operations.
• South Africa’s manufacturing sector’s contribution to the economy has decreased markedly since 2008.
• South Africa’s tariffs are higher than a number of its trade partners.
• Sustainability, particularly decarbonisation and green manufacturing.
• The manufacturing sector has become less concentrated in recent years.
• The share of metals, clothing, wood and pulp, and glass has declined.
• The Western Cape and KwaZulu-Natal have grown their share of manufacturing jobs recently, while Gauteng and Free State have declined.
Opportunities
• Investing in decarbonisation measures such as green hydrogen, EVs and producing renewable energy inputs.
• Investing in technology like AI, robotics and IoT.
• Redirecting exports to new markets, particularly the rest of Africa, following new US tariffs.
• Sourcing renewable energy to provide electricity to factories.
Challenges
• High electricity increases have made local manufacturing, particularly heavy industry, less competitive.
• Illicit trade of manufactured goods and manufacturing of illicit goods.
• Industrial policy’s focus on localisation has arguably reduced the competitiveness of the sector.
• Local manufacturing’s high CO2 emissions are a threat to the local sector, particularly from regulations such as CBAM.
• Logistics and infrastructure challenges have reduced the competitiveness of exports.
• Low GDP growth and high unemployment reduce demand for manufactured goods
• Special economic zones and masterplans have had limited success.
• US tariffs will likely reduce demand for manufactured goods heavily reliant on exports to the US.
Outlook
• Several manufacturers have recently announced moves to close operations.
• Key challenges such as energy and logistical constraints, electricity and labour costs combined with low labour productivity, and trade liberalisation have affected the sector.
• US tariffs may significantly affect manufacturing exports and result in job losses and company closures.
• The sector’s ability to arrest its current decline depends on finding new export markets and the country addressing electricity and logistics constraints and illicit goods.
• Poor economic growth will continue to reduce demand for manufactured goods.
Manufacturing Trends in South Africa
2025
Full Report
R 20 000.00(ZAR) estimated $1181.21 (USD)*
Table of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 3. | SIZE OF THE INDUSTRY | 4 |
| 4. | STATE OF THE INDUSTRY | 6 |
| 4.1. | Trade | 9 |
| 4.2. | Fixed Investment | 16 |
| 5. | KEY TRENDS | 17 |
| 5.1. | Manufacturing’s Declining Importance | 17 |
| 5.2. | Electricity Constraints | 19 |
| 5.3. | Infrastructure and Logistics Constraints | 20 |
| 5.4. | Illicit Trade and Manufacturing | 21 |
| 5.5. | Decarbonisation and Green Manufacturing | 21 |
| 5.6. | Automation, AI and Robotics | 23 |
| 5.7. | Localisation | 24 |
| 5.8. | Anti-Dumping Investigations & Tariffs | 25 |
| 6. | COMPETITION | 26 |
| 7. | INDUSTRY TRENDS | 28 |
| 8. | OUTLOOK | 29 |
| 9. | REFERENCES | 29 |
| 9.1. | Publications | 29 |
| 9.2. | Websites | 31 |
