Manufacturing Industry in South Africa: Trends and Challenges for 2026

In the first quarter of 2026, South Africa’s real GDP was 0.5% higher than the previous quarter. Manufacturing moved in the opposite direction, with Stats SA recording a 0.8% fall and naming it as the only industry that pulled GDP growth down.

That result needs some care. It does not place every factory or production business in the same position. The numbers point to an uneven picture. Production has weakened, sales have improved in some divisions, producer prices have moved higher, and employment has shifted from one quarter to the next.

For 2026, business owners should work from the latest numbers instead of carrying forward with last year’s plan.

Manufacturing Industry in South Africa: 2026 Snapshot

Manufacturing still has a strong place in South Africa’s economy, but the latest data shows strain across several divisions.

• In Q1 2026, five of the 10 manufacturing divisions recorded negative growth

• Stats SA identified the biggest drags as petroleum, chemical products, rubber and plastic products; basic iron and steel, metal products and machinery; and wood, paper, publishing and printing

The April 2026 production release continued the same pattern.

• Manufacturing production was 2.9% lower year-on-year and 2.7% lower month-on-month on a seasonally adjusted basis

• For February to April 2026, production was also down 1.3% over the three-month period

Production and Sales are Sending Different Signals

One of the more useful 2026 trends is the gap between production and sales.

• April’s production number was weaker. Sales, however, moved differently: at current prices, manufacturing sales were 4.7% above April 2025

• Seasonally adjusted sales edged up 0.7% between March and April, and the February-to-April total was 2.3% higher than the previous three-month period

The strongest three-month sales gains came from two divisions.

• Basic iron and steel, non-ferrous metal products, metal products and machinery rose by 5.7%

• Motor vehicles, parts and accessories and other transport equipment rose by 7.1%

PwC’s 2025 analysis of JSE-listed manufacturers shows why one number is not enough. Revenue fell 3.2%, but net profit rose 215.3% and net operating cash flows increased 22.2%. Revenue was weaker, but cash flow and profit performance improved.

Sector Trends to Watch in 2026

The latest numbers show pockets of strength and areas of real strain. A simple sector view helps separate the two.

Sector Trend	What the Data Suggests	Business Takeaway
Metals and machinery	Three-month sales were 5.7% higher by April 2026, although Q1 GDP data still showed strain in this group.	Check order strength, input costs and margins before raising output.
Automotive and transport equipment	Sales for the three months to April 2026 were up 7.1%, while April production was 11.0% lower year-on-year.	Plan production carefully, as demand and factory output are not moving together.
Petroleum, chemicals, rubber and plastics	Q1 was weak for this division, with Stats SA listing it among the largest negative contributors. May producer-price data added another pressure point.	Recheck supplier rates, raw material movement and batch cost before setting production runs.
Food and beverages	February-April 2026 sales were about R225.5 billion, 1.1% higher than the previous three-month period.	Prioritise expiry checks, batch labels, fresh stock rotation and wastage records.

South Africa’s automotive master plan is aiming for 1.4 million vehicles built in the country, along with a higher share of local parts. The latest figures show the distance still to cover: 602,302 vehicles were produced locally in 2025, and imports held 69.3% of light vehicle sales.

Input Costs are Putting Margins Under Pressure

Cost pressure is one of the most important 2026 trends for the manufacturing industry in South Africa.

• Stats SA reported that final manufactured goods producer inflation reached 7.8% year-on-year in May 2026, up from 4.8% in April

• Intermediate manufactured goods rose even faster, with producer inflation at 13.7%. Electricity and water producer prices rose by 12.3%

For food, chemicals, packaging, plastics, cosmetics and FMCG manufacturers, cost control needs to sit close to production planning. Batch cost, wastage, expiry, supplier rates, and output quantity should be checked together.

Employment and Factory Sentiment Are Still Uneven

Employment data also shows a mixed picture.

• Stats SA’s Quarterly Labour Force Survey recorded 1.587 million people employed in manufacturing in Q1 2026

• That was 38,000 higher than the previous quarter, but 90,000 lower than the same quarter a year earlier

The quarterly gain is useful, but the yearly comparison still shows pressure. For manufacturers, this can affect shift planning, overtime, training, and machine use.

Sentiment is not steady either.

• May’s Absa manufacturing PMI came in at 50.8, Reuters reported, compared with 52.6 in April

• The headline reading was still above the 50-point mark, but business activity and new sales orders had moved back into contraction

What These Trends Mean for South African Manufacturers

The 2026 data gives manufacturers a practical message: plan carefully, review often, and keep key numbers visible.

1. Set Production Targets With Current Data

A manufacturer should not set production targets only from last year’s sales. It is safer to compare sales, production cost, stock ageing, supplier delays, and actual output.

This helps the business see which products are worth producing and which ones are tying up cash in slow-moving stock.

2. Review Product Costs More Often

Costing also needs more attention. When producer prices rise quickly, the selling price from three months ago may no longer protect the margin. Raw material cost, packaging cost, wastage, labour and transport should be reviewed at product level.

3. Track Batches, Wastage and Output

Batch tracking is becoming more useful for food, cosmetics, chemicals, plastics and FMCG businesses. Manufacturers need to know which material went into each batch, what it cost, what output was produced, and what was wasted.

4. Keep Reports Connected Across Locations

For multi-location manufacturers, stock, sales and purchase records can split quickly. Connected inventory, production, purchasing, VAT and reporting can help managers spot issues earlier.

2026 Planning Checklist for Manufacturers

Use this as a quick planning check before setting production or purchase targets:

• Review which products are growing and which are holding too much stock

• Track raw material costs before updating selling prices

• Monitor supplier lead times for critical inputs

• Check wastage, expiry, and internal consumption every month

• Use sales and production reports before adding new SKUs or machinery

Final Thoughts

The latest data gives a mixed picture for the manufacturing industry in South Africa. Production data shows pressure, sales data shows selected recovery, cost data points to margin risk, and employment data remains uneven.

For manufacturers, 2026 planning should be built on current numbers. Stock, purchases, production, wastage, costs and reports should be checked side by side, instead of sitting in separate records.

When those numbers are easier to follow, teams can react sooner to demand changes, supplier price shifts or slower production. A connected ERP implementation such as VasyERP can support that discipline without adding more manual work.

Last Updated on July 3, 2026