Manufacturing in crisis: Saftu and Cosatu warn of job losses amid declining production

The South African Federation of Trade Unions (Saftu) and the Congress of South African Trade Unions (Cosatu) have raised concerns about job losses amidst a decline in the country's manufacturing sector. 

 This was after Statistics South Africa (Stats SA) released data showing that manufacturing production decreased by 0,8% in March compared to the same period last year. 

This marked the fifth consecutive month of decline in industrial activity.

The largest negative contributors were petroleum, chemical, rubber and plastic products and electrical machinery. 

On a quarterly basis, production fell by 2,3% in the first quarter of 2025 compared to the fourth quarter of 2024. It also decreased by 2,2% on a monthly basis - March 2025 compared to February 2025. 

Saftu attributed the decline to neoliberal policies, insufficient investment and an extractive economic structure. The federation called for policies that prioritise job creation and industrial development. 

On the other hand, Cosatu said it was concerned about the loss of jobs. 

The union warned that this would be worse as the expanded definition of unemployment, which includes those discouraged from seeking employment, remained unchanged at 41,9%.

Saftu said also this confirms a long-term trend of deindustrialisation. 

Since 1994, Saftu said, manufacturing’s share of Gross Domestic Product (GDP) has declined from 22% to just over 11% while capacity utilisation has dropped from 82% to 65%.

The union pointed to a decline in investment, both public and private, as a key factor in the manufacturing sector’s struggles.

The federation added that Gross Fixed Capital Formation was 14,93% of the GDP in 2023, which is down from 20% in the early 2000s. It said the private sector investment was 12,37% of the GDP, while public sector investment was just 2,5%. 

Saftu’s general secretary, Zwelinzima Vavi, said these figures confirm that both the State and private capital have retreated from investing in the productive economy.

Vavi said if aluminum and steel had been factored in, the deindustrialisation rates would be worse. 

“Unless state policy changes, we can anticipate even worse bouts of deindustrialisation,  because of the steel industry’s crisis.  Already the crash of steel output from a peak of nine million tonnes a year to around four million tonnes has required an ongoing bailout of  ArcelorMittal foundries that were due to close,” he said, warning that US President Donald Trump’s decision to impose tariffs on imports would also worsen the situation.  

“Given the extreme animosity to  South  Africa from Trump and a new group of paleo-conservative imperialist powerbrokers in  Washington, due to our government’s  (correct) labeling of Israel as genocidal and pursuit of affirmative action and land reform,  we may anticipate far worse to come.  There will likely be no renewal of the  Africa  Growth and  Opportunity  Act (AGOA) and intensified punitive tariffs on all exports are certain once the  90-day  pause on  South  Africa’s  32%  tariff penalty is lifted in July. “

“South  Africa cannot  overcome its crisis through austerity or corporate appeasement.  Both the private and public sectors have withdrawn from investment.  The time has come for a bold shift to a developmental state that leads investment, reindustrialises the economy,  and places public goods over private profits.  Power concedes nothing without a struggle  —  the working class must mobilise for a new economic future,” said Vavi.

Cosatu called on the government to seek alternate trading partners to counter the impact of US tariffs. 

“But at the same time ensure the continuation of AGOA or a similar trade agreement between the USA and SA that increases trade and investment opportunities between both countries,” said spokesperson Zanele Sabela, who added that South Africa also needs to accelerate the role in the African Continental Free Trade Area (ACFTA) to unlock trade with Africa.

“Simultaneously, more must be done to ensure Eskom is able to provide reliable and affordable electricity, Transnet can transport our mining, manufacturing and agricultural goods, and Metro Rail workers to their destinations on time and at affordable prices. Municipalities must be fixed to provide the basic services the economy depends on.”

“A new mass industrial financing programme, mobilising public and private resources must be put in place to support the reindustrialisation of the economy and in particular export and jobs intensive sectors,” said Sabela.

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