What will give manufacturers the confidence and capability to invest for the next decade, asks Burak Bilgisel, Regional Managing Director, Sub-Saharan Africa at DEFY. Here, he discusses the role of skills, technology, operational resilience and collaboration in building a competitive manufacturing sector.
According to Statistics South Africa, South African manufacturing contracted by 1.5% in the second quarter of 2026, marking the sector’s fourth consecutive quarterly decline. Reversing this pattern will require manufacturers to continue improving their competitiveness while navigating high operating costs, infrastructure constraints, skills shortages and increasing global competition. All of these factors influence decisions around production volumes, pricing, new equipment and future capacity.
Manufacturers can only make these types of decisions with confidence when they have some certainty about the conditions in which they will be operating. An enabling environment gives them access to reliable infrastructure, the right skills and a supply network capable of supporting production. It also gives businesses a sound basis for deciding when and where to invest.
Productivity must come from people and technology
Over the next decade, manufacturers will need to look at productivity differently. Automation, for example, can help improve accuracy and consistency, particularly where repetitive processes cause bottlenecks or affect quality. Its value depends on how it is introduced into the factory and how well it supports the people working there.
As technology becomes part of more factory processes, the mix of skills manufacturers need will continue to change. Technical knowledge remains essential, while digital literacy, data interpretation and problem-solving are becoming part of many factory roles. Training also cannot be treated as something that happens once. It needs to keep pace with changes in equipment and production processes, while giving employees clear opportunities to develop within the business.
Partnerships with technical colleges, universities and specialist training providers can help address skills gaps before they begin to affect production. Manufacturers also need to retain the practical knowledge that already exists inside their factories. Experienced employees understand how the operation works in practice, while new skills and tools can help them solve production problems.
Resilience must support the business case
Energy resilience has become a basic operating requirement for South African manufacturers. Now, the next step is to connect it directly to the business case. Backup power may keep production moving during an interruption, while energy efficiency, smart monitoring and investment in alternative supply can help control costs and make planning easier.
Reliable logistics, responsive local suppliers, access to components and regular maintenance also affect whether a factory can meet its commitments to customers. Building resilience means making practical decisions across the operation to reduce disruption and maintain consistent production.
A manufacturer cannot compete on the strength of its production line alone. It depends on a network of people, suppliers and services working together so that local products reach customers at the right quality, price and time.
Investment needs a long-term view
Decisions about new machinery, product development, training and factory upgrades are based on what a business expects over several years. Manufacturers need dependable operating conditions and a clear market for their products before they can commit capital to plans of this scale.
Localization also requires a clear and commercially sustainable strategy. Manufacturers need to identify the categories in which South Africa can build genuine competitive advantage, supported by real consumer demand, appropriate skills, reliable supply chains and the potential to serve both domestic and export markets. The opportunity lies in understanding what customers need, designing products for local conditions, managing cost and quality, and using South African production as a base from which to serve regional and international markets.
Close relationships across the value chain can provide the information and support manufacturers need to make investment decisions. Retailers and suppliers can share information about demand, plan volumes and work through availability issues together. Technology partners can help factories choose systems that address genuine production needs. Employees can use their knowledge of the production line to identify where products or processes could be improved.
South Africa does not need to build its manufacturing capability from the ground up. It already has factories, industrial expertise and established supply networks. The priority now is to create the confidence and capability required for manufacturers to modernise those assets, develop people, improve productivity and invest for the long term.
When businesses, employees, training institutions, suppliers, retailers and policymakers work towards that shared objective, local manufacturing can do more than preserve existing capacity. It can develop new products, serve new markets and retain skills, investment and economic value within South Africa.