South Africa is stepping up efforts to rebuild its manufacturing industry, with the government placing industrialisation, electric vehicle production and domestic mineral processing at the centre of its economic development strategy.
The push comes as new figures from Statistics South Africa (Stats SA) reveal that manufacturing output declined by 3.5% year-on-year in September 2026, highlighting the urgency of strengthening the country’s industrial base.
Despite the annual contraction, the sector recorded a 0.9% increase in production during the third quarter compared with the previous three months. Manufacturing sales also increased by 3.2% over the same period, offering some indication of improving activity in parts of the industry.
However, the recovery remains uneven.
Government targets a new manufacturing future
The government is pursuing an industrial development strategy built around three priorities: decarbonisation, diversification and digitalisation.
Approved in June 2026, the strategy aims to strengthen domestic production, attract investment and position South Africa to benefit from emerging global industries.
Among its priorities are expanding the local processing of mineral resources, developing the electric vehicle industry and accelerating investment in energy infrastructure.
The approach is intended to move South Africa beyond its reliance on exporting raw materials towards producing more finished goods and higher-value industrial products locally.
Job creation puts pressure on industrial policy
The urgency of the government’s plans is underscored by the loss of approximately 20,000 manufacturing jobs during the second quarter of 2026.
According to Stats SA’s Quarterly Employment Statistics survey, manufacturing recorded the largest employment decline among the sectors covered.
The sector also contracted by 1.8% during the second quarter, subtracting 0.2 percentage points from the country’s GDP growth.
Manufacturing remains strategically important to the economy, accounting for approximately 13% of GDP and directly employing more than 1.6 million people, according to the Department of Trade, Industry and Competition.
Quarterly growth offers a measure of hope
While September’s annual production figures point to continuing difficulties, the quarterly performance provides a more mixed picture.
Food and beverages, basic metals, fabricated metal products and machinery supported the increase in manufacturing output during the third quarter.
Manufacturing sales also benefited from stronger performance in motor vehicles and transport equipment, petroleum, chemicals, rubber and plastics, as well as food and beverages.
Nevertheless, monthly manufacturing sales declined by 2.2% in September, following increases in July and August.
Can South Africa turn industrial ambitions into jobs?
The central challenge for policymakers will be translating industrial development plans into tangible economic results.
Expanding domestic mineral processing, developing electric vehicle manufacturing and investing in energy infrastructure could create opportunities for local businesses, investors and skilled workers.
However, sustained progress will require stronger industrial competitiveness, reliable infrastructure, investment and growing demand for locally manufactured products.
For South Africa, the manufacturing recovery is about more than reversing declining production figures. It is about rebuilding productive capacity, creating employment and establishing a stronger position in global industrial supply chains.