The South African Federation of Trade Unions (SAFTU) notes with grave concern the latest manufacturing production figures, which confirm what workers have long experienced in their daily lives: the continued and accelerating collapse of South Africa’s productive economy.
Manufacturing production declined by 2,8% in February 2026 compared to the same period in 2025. This is not an isolated fluctuation but part of a sustained downward trend. On a month-on-month basis, production fell by 2,2% in February, following volatility in preceding months, while output contracted by 2,0% over the three months to February 2026. Eight out of ten manufacturing divisions recorded negative growth, demonstrating the breadth and depth of the crisis.
The most significant contractions occurred in core sectors that historically anchor industrial employment and value creation. Food and beverages declined by 4,5%, wood, paper and publishing by a staggering 9,7%, and basic iron and steel, metal products and machinery by 3,6%. Over the three-month period, the collapse in motor vehicle production down 5,2% and continued decline in metals and food production further illustrate the systemic erosion of South Africa’s industrial base.
Even more alarming is the contraction in manufacturing sales, which fell by 3,1% over the same three-month period. The sharp decline in the motor vehicle sector, with sales dropping by 17,1%, and further contractions in chemicals and plastics, point not only to weakening production capacity but also to collapsing demand. This reflects a broader economic stagnation where both supply and demand are being undermined simultaneously.
These figures are the direct outcome of a macroeconomic policy framework that has, for decades, prioritised fiscal austerity, inflation targeting and trade liberalisation over industrial development, employment creation and economic sovereignty. South Africa’s continued adherence to neoliberal orthodoxy has hollowed out domestic productive capacity, exposed local industries to import competition without adequate protection, and subordinated industrial policy to the dictates of financial markets.
The result is a classic pattern of de-industrialisation: factory closures, retrenchments, declining output, and shrinking industrial employment. Entire sectors are being weakened, while the economy becomes increasingly dependent on raw mineral exports and financial flows that generate little employment.
The decline in food production is particularly concerning, as it has direct implications for food security and the cost of living. The contraction in metals and machinery undermines the country’s ability to support infrastructure development and industrial expansion.
The collapse in the automotive sector, one of South Africa’s key manufacturing pillars signals a broader crisis of industrial competitiveness, energy reliability, logistics capacity and domestic demand.
At the heart of this crisis is a policy contradiction.
The Government speaks of industrialisation, localisation and inclusive growth, yet continues to implement policies that suppress demand, constrain public investment, weaken state capacity, and incentivise private capital to invest elsewhere. The commitment to primary surpluses, high interest rates and fiscal consolidation actively undermines the very conditions required for industrial recovery.
Workers are paying the price. Every percentage decline in manufacturing output translates into job losses, reduced working hours, and deepening insecurity for working-class households. Communities built around industry are collapsing, and young people are being locked out of meaningful employment opportunities.
SAFTU reiterates that South Africa cannot reverse de-industrialisation without a decisive break from neoliberal policy.
What is required is a fundamental restructuring of the economy, anchored in:
- A state-led industrial strategy focused on localisation, beneficiation and expansion of manufacturing capacity;
- Active protection of vulnerable industries against unfair import competition and dumping;
- Massive public investment in infrastructure, energy and logistics to support industrial growth;
- A shift in macroeconomic policy away from austerity toward expansion, job creation and demand stimulation;
- Lower interest rates to support productive investment rather than financial speculation;
The current trajectory is unsustainable. An economy that destroys its productive base cannot create jobs, reduce inequality or achieve meaningful development. These manufacturing figures are not just statistics.
Unless there is an urgent and decisive shift in policy, South Africa will continue down the path of de-industrialisation, unemployment and social crisis.
The future of the country depends on rebuilding its productive economy.
A statement was issued on behalf of SAFTU by the General Secretary, Zwelinzima. Vavi.
For media inquiries, contact the National Spokesperson at
Newton Masuku
newtonm@saftu.org.za
0661682157
Media Officer
Asive Dyani
0719019564
