SA manufacturing industry continues to shrink

Pretoria - According to the latest manufacturing survey released by Statistics South Africa (Stas SA) on Monday, 24 July 2023, South Africa has lost 309 000 jobs (-22,1%) in manufacturing since 2005.

In 2021, South Africa had over a million jobs (1 092 000) in the manufacturing sector compared with 1 401 000 jobs in 2005. Over the same period, the contribution of manufacturing to the gross domestic product (GDP) declined from 19,1% in 2005 to 13,2% in 2021.

The manufacturing sector has seen fluctuations in employment over time affecting ‘textiles and clothing’, ‘metals
and machinery’, ‘wood, paper and publishing’ and ‘furniture and other manufacturing’.

Stas SA said Job losses were reported mainly for ‘textiles and clothing’ (-121 500), ‘metals and machinery’ (-51 700), ‘wood, paper and publishing’ (-43 700), ‘food and beverages’ (-33 200) and ‘furniture and other manufacturing’ (-29 700).

"The manufacturing reports measure expenditure, production, income and spread of the manufacturing sector in
the country. The financial report also highlights employment per sector (sectors that are expanding and regressing), and the contribution per province and district/metro. In addition, the production report provides a list
of critical products produced in the country and major exports.

"Manufacturing is mainly concentrated in the City of Johannesburg, Ekurhuleni, City of Cape Town and eThekwini. In 2021, the four cities accounted for 60% of the national workforce and just over half of sales of goods and services. The report further shows that most manufacturing jobs were in Gauteng; City of Johannesburg had the highest number of jobs, which accounted for 17,2% of the national total. Gauteng as an economic hub recorded the highest income from sales in 2021, which was R974,0 billion (41,6%).

"Gauteng, Western Cape and KwaZulu-Natal contributed 77,7% to total income from sales. The three provinces
had a combined income of R1,8 trillion in 2021," it explained.

Meanwhile, Stats SA further explained, the manufacturing report gives insight into which areas contributed more to total income from sales. The top 10 districts or metros contributed 80,2% or R1,9 trillion to total income from sales, with Ekurhuleni having the highest income from sales (R346,4 billion or 14,8%), followed by City of Johannesburg (R336,7 billion or 14,4%), City of Cape Town (R328,0 billion or 14,0%) and eThekwini (R271,2 billion or 11,6%).

The top 10 products manufactured in South Africa were ‘diesel fuel, automotive’, ‘medium passenger motor vehicles’, ‘light commercial vehicles’, ‘unleaded petrol, 95 octane’, ‘aerated soft drinks’, ‘gold’, ‘autocatalytic converters’, ‘semi-finished products of aluminium’, ‘lager beer’ and ‘flat-rolled products of steel’.

In terms of income, these top 10 products contributed 22,5% or R511,4 billion to income generated from sales. The survey also reported that the top 10 products exported included ‘medium passenger motor vehicles’, ‘light commercial vehicles’, ‘small passenger motor vehicles’, ‘gold’, ‘autocatalytic converters’, ‘alcohols, phenols, phenol-alcohols, and their derivatives’ and ‘other parts, components and accessories of motor bodies’.

In fact, the production of motor vehicles is big business for the export industry. For example, 79% of income generated from the production of ‘medium passenger motor vehicles’ was from export sales in 2021.

The manufacturing survey is a large sample survey of tax-registered enterprises. It is conducted every three to five years and provides information on the size, nature and structure of the industry.

The survey tracks the performance of enterprises whose main source of income or primary activity is manufacturing.

The 2021 results indicate the impact of the COVID-19 lockdown on the performance of these enterprises.