The South African Federation of Trade Unions (SAFTU) has studied the GDP figures
released today (0.5% growth in Q1 2026) together with the Quarterly Labour Force
Survey (QLFS) published last month. When read together, they reveal a devastating
truth: the economy is being restructured away from decent jobs, and the government
is celebrating it.
THE MANUFACTURING COLLAPSE WHERE DECENT JOBS GO TO DIE
Manufacturing has historically been the engine of formal, unionized, pensionable
employment in South Africa. It was the sector where a worker could build a life, buy a
home, and send children to university. That engine has been deliberately destroyed.
Today’s GDP data shows:
1 Manufacturing declined by 0.8% in the first quarter of 2026 Five of the ten manufacturing divisions reported negative growth
The largest contractions were in petroleum, chemicals, rubber and plastic;
basic iron and steel; metal products and machinery; wood and paper products
This is not a blip. This is a long-term structural liquidation of industrial capacity. Since
1994, the government has allowed manufacturing’s share of GDP to collapse from
23% to just 13%, a de-industrialization without parallel in a peaceful transition.
THE LINK TO THE QLFS CARNAGE CAUSE AND EFFECT
The QLFS for Q1 2026 showed that manufacturing lost 61,000 jobs in Q4 2025
alone and approximately 127,000 jobs year-on-year.
The relationship is direct:
GDP Indicator (Q1 2026) Labour Market Consequence
Manufacturing output -0.8% Permanent job losses, plant closures, declining shift
work. Petroleum, chemicals, metals, machinery, all negative. Skilled artisans,
machine operators, and production workers were thrown onto the street
Finance, real estate +0.9% A handful of high-end jobs for graduates; no absorption of
semi-skilled workers
FINANCE AND REAL ESTATE DO NOT CREATE DECENT JOBS FOR THE WORKING CLASS
The GDP growth was propped up by the finance, real estate, and business services
industry, which increased by 0.9% and contributed 0.2 percentage points to the
headline number. Agriculture also grew by 3.9%, primarily export-oriented
horticulture, not small-scale food production.
But here is the hard truth that the government and its economist cheerleaders refuse
to say aloud:
- Finance and real estate employ a tiny fraction of the workforce, overwhelmingly graduates, professionals, and administrator
2 These sectors do not absorb retrenched miners, factory workers, or
construction labourers
3 A financial services job cannot be created in Soshanguve or Motherwell when
a steel plant closes in Newcastle, or a textile factory shuts in Pinetown
THE NEOLIBERAL TRADE-OFF FINANCE FOR FACTORIES, POVERTY FOR PROFIT
The government has made a conscious policy choice. It has:
- Refused to protect domestic manufacturing through tariffs, local procurement, and industrial subsidies
2 Opened the economy to cheap imports under the World Trade Organisation
and free trade agreement pressure
3 Privatised and outsourced state-owned enterprises and public services,
destroying thousands of direct public sector jobs
4 Allowed energy and logistics crises to persist, raising costs for manufacturers
while finance houses thrive on speculation
The result is an economy that can post 0.5% “growth” while manufacturing, the
historic home of unionised, decent jobs, bleeds out.
THE LOAD REDUCTION CONNECTION MANUFACTURING CANNOT SURVIVE IN THE DARK:
While load shedding has technically ended, load reduction continues to choke small
manufacturers, panel beaters, bakeries, and workshops in black working-class
areas. A factory in Pinetown or a tshisanyama in Diepsloot cannot operate when
power is cut for 8 hours a day, three times a week. Load reduction is the final nail in
the coffin of township-based manufacturing and informal production.
STOP CELEBRATING FINANCE AND START REBUILDING THE INDUSTRY:
The government cannot claim success with 0.5% growth while manufacturing, the
home of decent jobs, shrinks every quarter.
We demand:
1.An immediate industrial policy that reverses de-industrialisation through state-
led investment,
2 local procurement quotas, and tariff protection for strategic sectors
3 An end to load reduction, declare it a public emergency, and invest in
township grid upgrades so that small manufacturers can operate.
4 Renationalisation and public ownership no more PPPs and privatisation that favour finance capital over productive capital
5 A ban on retrenchments in manufacturing and a jobs-and-skills fund paid for by a levy on financial sector profits
YOU CANNOT FEED A FAMILY WITH A FINANCIAL DERIVATIVE
The 0.5% growth figure is a lie wrapped in a statistic. An economy that grows on the
back of finance and real estate while manufacturing collapses is not an economy that serves workers. It is an economy that serves the rich. Every factory closure means a
community destroyed. Every steel plant shutdown means a generation of artisans
who will never work again.
The government must choose: manufacturing and decent jobs, or finance and mass
unemployment. It cannot have both.
A statement was issued on behalf of SAFTU by the General Secretary, Zwelinzima
Vavi.
For media inquiries, contact the National Spokesperson at
Newton Masuku
National Spokesperson
Newton Masuku
0661682157
Media Officer
Asive Dyani
0719019564
