Data released by Statistics South Africa shows that manufacturing production declined by 2.6% in November 2024 compared with November 2023.

The largest negative contributions came from motor vehicles, basic iron and steel, metal products and machinery, wood and wood products as well as textiles and clothing.

An Independent Economist, Elize Kruger, says the latest manufacturing data paints a bad picture for the overall economic growth outcome in 2024.

“Very clear that the manufacturing sector remains on the back foot in November for reasons such as weak local and global demand as well as ongoing logistical constraints. The main weakness was evident in sub-sectors such as motor vehicle manufacturing, basic iron and steel production, as well as wood, paper and printing production. These numbers do not bode well for our fourth quarter GDP growth which is likely to be disappointing,” says Kruger.

VIDEO | Low demand is one of the reasons identified for the decline in manufacturing figures.

An analyst at ETM Analytics, Laura Campbell, says the manufacturing sector needs policy reform in order to stimulate investment by the private sector.

Campbell notes that should investments in the manufacturing industry remain delayed, it will adversely affect growth and job creation by the sector.

“While we are seeing GNU optimism, lower interest rates and to a degree, the end of loadshedding, which has led to some improvement in the consumption sectors of the economy, it has clearly been insufficient to improve the de-industrialisation trend. The reality is manufacturing will continue to stagnate, while below pre-virus levels, unless we see the GNU implementing pragmatic policy changes. And a case in point here is the recent announcement by ArcelorMittal, South Africa’s only steel maker, that its steel production activities in Newcastle and Vereeniging will cease at the end of January. So, unless there’s policy reform, there’s little incentive for businesses to invest in the industry,” says Campbell.