A new report by Stats SA shows that South Africa’s manufacturing production dipped in July.

According to the report, "Manufacturing production decreased by 0.7% in July 2025 compared with July 2024. The largest negative contributions were made by the basic iron and steel, non-ferrous metal products, metal products and machinery division (-3.3%) and the wood and wood products, paper, publishing and printing division (-1.8%)."

The July dip follows a 1.9% lift in the year-on-year manufacturing production figure for June, and a more modest 0.2% lift in May that followed declines in February, March, and April.

Bheki Mahlobo, economics and policy editor at The Common Sense, said the data revealed a struggling manufacturing economy making only limited progress against a raft of domestic and foreign headwinds.

Manufacturing’s share of GDP in South Africa has halved over the past 40 years as skills and infrastructure deficits, electricity shortages, trade union activism, and capital taxes reduced South Africa’s investment competitiveness relative to its global peers.

This is a particularly serious problem for South Africa’s unity government, given that manufacturing is an important stepping stone for people moving from lives of relative poverty into the middle classes. The world’s most successful emerging markets were able to create large numbers of manufacturing jobs for people exiting rural poverty as they moved to cities, which in turn allowed them to educate their children sufficiently for these to enter the middle classes.

Without that stepping stone in place, the task of creating avenues out of poverty for South Africans is greatly complicated, particularly given the poor quality of the annual matric class.

However, Mahlobo said that the manufacturing problem had arisen chiefly because of poor policy choices and could be overcome to a significant extent if the country invested in the refitting of its coal fleet, fully concessioned ports and railways, and scrapped taxes on capital.