Manufacturing Production
January 2025
The drop in production volumes can be attributed to several key factors:
- Petroleum, Chemical Products, Rubber, and Plastic Products: Production fell by 9.1%, contributing -2.1 percentage points to the overall decline in manufacturing.
- Motor Vehicles, Parts, and Accessories: This sector experienced a notable decrease of 10.1%, subtracting -0.8 percentage points.
- Food and Beverages: Production in this sector declined by 3.2% year-on-year, contributing another -0.8 percentage points.
In contrast, the wood and wood products sector saw an increase of 5.6%, adding 0.6 percentage points to total output growth.
The seasonally adjusted value of sales in the manufacturing sector decreased by 2.0% in January 2025 compared to January 2024. Additionally, the rolling quarter ending in January 2025 showed a decline of 0.9% compared to the previous quarter ending in October 2024. Key contributors to this decline included:
- Motor Vehicles, Parts, and Accessories: This sector fell by 3.1%, contributing -0.5 percentage points.
- Basic Iron and Steel, Non-Ferrous Metal Products, Metal Products, and Machinery: This category decreased by 3.3%, adding -0.7 percentage points to the quarterly contraction.
Manufacturing remains a vital sector in South Africa, being the most industrialised country on the African continent. It employs approximately 1.6 million people and contributes about 12.5% to the nation’s GDP. Recent employment statistics reveal a positive trend, with job numbers rising from 1.635 million in Q3 to 1.675 million in Q4 of 2024. This increase is encouraging, particularly given the relatively stable electricity supply and consistent PMI figures in the final stages of 2024.
However, manufacturing business owners are adopting a cautious “wait-and-see” approach to investment and medium-term growth. Rising diplomatic tensions between Pretoria and Washington may lead to potential trade restrictions on South African manufactured goods in the near future. Reports from the Reserve Bank and commercial banks indicate that corporate South Africa is holding significant cash reserves, suggesting that companies are awaiting clarity from the Government of National Unity (GNU) regarding industrial policy, promised reforms, and resolutions to the ongoing standoff with the U.S.
