Manufacturing in South Africa has many facets and considerations one must consider when looking at the industry. This report has been compiled to provide a quick snapshot of some of the realities of the industry and the statistics about the industry.

Manufacturing is centred on three main geographic areas

More than half (52%) of the manufacturing industry’s national workforce resides in 3 metros; Johannesburg, Cape Town and eThekwini. In 2014, 25% of the national manufacturing workforce was recorded as being employed in Johannesburg. If one considers the statistics of the 9 provinces of South Africa, Gauteng employs that largest percentage of manufacturing workers, at 44%, Western Cape 19%, Kwazulu-Natal 19%, and the Eastern Cape 7%. All other provinces currently represent less than 5% each.

Metals and Machinery manufactures were recorded as the largest employers in the sector in 2014, with a 22% stake. The food and beverage sector is second, employing 20% of the workforce while Petroleum and Chemical is responsible for around 14% of manufacturing jobs. Wood, paper and publishing, textiles & clothing and transport equipment round out the other important categories.

The number of people employed in the manufacturing sector has declined over the last few years. This number has gone from 1,44 million in 2005 to 1,19 million in 2014, to 1,1 million in 2019. Despite this, manufacturing has often been presented as one of the job sectors with the most promising potential to create jobs at respectable pay levels for unskilled and semi-skilled workers.

Manufacturing is not running at full capacity

The stats have shown that South Africa is currently not making use of its full capacity for manufacturing. In fact, only 81% of the installed manufacturing capacity of South Africa is being used. This under-utilisation has been ascribed to a lack of demand, and to a lesser extent, a lack of skilled and semi-skilled labour.

Some sectors have grown, while others have stagnated or diminished.

Motor vehicles, parts and accessories and other transport equipment have seen positive growth, while textiles, clothing, leather and footwear have dropped. Manufacturing production in 2019 was adversely affected by electricity-supply shortages, higher input prices and weak domestic demand.  Currently, the leading markets for plastic are in the packaging, building, construction and automotive industries.

One recent GDP report published by Statistics South Africa demonstrated that Manufacturing currently accounts for just under 14 per cent of the nations’ GDP, at 13,5%. This equates to R386 billion of the total economic value.

Manufacturing is the 4th largest industry in South Arica, and within the sector, the food and beverages category is the biggest player, contributing 26% to the total manufacturing value added. Petroleum and chemical products are second, at 24%, followed by basic iron and steel (19%).

With such a large impact on the national economy, the importance and value of manufacturing cannot be understated. This sector represents a significant job market, valuable skillsets and critical economic power.

Plastic & Chemical Trading is passionate about manufacturing in South Africa.. Contact us today to ask how we can streamline and improve your business!