Manufacturers fault weak public services in new survey

Manufacturers fault weak public services in new survey

Survey finds municipal services and rail logistics failing manufacturers

South Africa’s manufacturers have delivered a blunt verdict on the public infrastructure and services they depend on, with 68.8% of respondents to a new survey describing government support at national, provincial and municipal level as either “weak or very weak”. The findings appear in the inaugural quarterly South African manufacturing report for the second quarter of 2026, prepared by the Centre for African Industrialisation.

The ratings are harshest at the municipal tier. More than half of respondents rated the quality and reliability of municipal services as mostly very low. Respondents quoted in the report are scathing about the operational realities they face. One noted that continued above-inflation increases in the cost of utilities and municipal services, especially in eThekwini, are eroding cost competitiveness against international rivals and against manufacturers located in other municipalities that offer discounted rates within their precincts. Another said that in other countries government supports industry, while in South Africa it does not support industry “in almost every way conceivable”. A third cited high transport costs driven by fuel prices, the cost of B-BBEE compliance and decaying municipal infrastructure as factors making the firm less productive. A further respondent reported very low support for localisation.

The logistics findings point to where delivery is failing most visibly. Manufacturers were asked to rate the quality, cost and reliability of road, rail, port and air logistics. Rail and port logistics scored particularly poorly on quality and reliability, with 57.1% of respondents rating rail reliability as very low, making rail transport an operational bottleneck. Air logistics drew favourable quality and reliability ratings, though its costs are considered very high.

Meanwhile, there are signs of remedial action on the ports side. The Port of Durban was ranked the world’s most improved port in the latest rankings compiled by the World Bank and S&P, released in June this year, and the ports of Ngqura and Port Elizabeth also placed in the global top 10 for improvement. Minister of Transport Barbara Creecy said on Friday that the leadership of the Durban Gateway Terminal has taken remedial actions to address concerns raised by shipping lines and industry stakeholders over operational challenges in recent months. Those concerns included vessel delays, truck congestion, equipment constraints and the impact of system changes on terminal operations. The Gateway Terminal handles 48% of all containerised freight volumes in the country, making its performance central to the sector’s logistics chain. Creecy said the immediate steps represent an estimated investment of R737 million, while longer-term measures will require an estimated R1.17 billion.

The survey’s grim assessment of public support sits against the backdrop of a sector still carrying substantial weight in the economy. In a foreword to the report, Justin Barnes, executive director of the Toyota Wessels Institute for Manufacturing Studies, noted that despite an extremely challenging last decade, manufacturing remains responsible for over 1.5 million direct jobs and contributes over 12% of the country’s GDP.

The quarter ending June 2026 brought little relief. The report states that the sector continues to navigate sustained headwinds, reflected in both official data and direct industry feedback. Statistics SA recorded a 1.8% quarter-on-quarter contraction in manufacturing output and an overall 0.2% decline in national GDP. The report says these macroeconomic figures align closely with the operational strain indicated by the survey, in which over a quarter of respondents experienced severe contractions of 5.1% or more in sales, domestic sales and operating profits. The contraction has extended to the job market, with the Quarter 2 Labour Force Survey recording a 1% decline in manufacturing employment alongside a 0.1% contraction in total employment.

Yet inside the factory gates, delivery appears steadier. The report notes that despite these external pressures, manufacturing enterprises demonstrate internal stability: 81.3% of respondents report healthy or very healthy labour relations within their own firms, and 64.6% rate physical workplace safety as safe or very safe.

Outcomes for the quarter were mixed, though more manufacturers experienced negative growth than positive growth across the landscape. The Centre for African Industrialisation said the inaugural survey is based on a stratified sample of manufacturing firms representative of the spatial, sectoral and employment distribution of manufacturing in South Africa. Responses came from 48 firms whose participating facilities employ a total of 35 677 people. The survey targeted senior management across the country’s major provincial manufacturing hubs in Gauteng, KwaZulu-Natal, the Eastern Cape and Western Cape, with industry associations also approached to voluntarily distribute the survey link to their members.

Whether the R737 million in immediate port fixes and the R1.17 billion in longer-term measures can begin to close the gap between what manufacturers say they need and what they are getting will be a question for the quarters ahead.

Q&A

How do manufacturers rate government support for the sector?

68.8% of survey respondents described government support at national, provincial and municipal level as either weak or very weak, with ratings harshest at the municipal tier, where more than half rated the quality and reliability of municipal services as mostly very low.

Which logistics modes performed worst and best in the survey?

Rail and port logistics scored particularly poorly on quality and reliability, with 57.1% of respondents rating rail reliability as very low. Air logistics drew favourable quality and reliability ratings, though its costs are considered very high.

What remedial actions are being taken at the Durban Gateway Terminal?

Transport Minister Barbara Creecy said the terminal's leadership has taken remedial actions to address vessel delays, truck congestion, equipment constraints and the impact of system changes. The immediate steps represent an estimated R737 million investment, with longer-term measures requiring an estimated R1.17 billion.

What was the state of the manufacturing economy in the quarter ending June 2026?

Statistics SA recorded a 1.8% quarter-on-quarter contraction in manufacturing output and a 0.2% decline in national GDP. Over a quarter of respondents experienced severe contractions of 5.1% or more in sales, domestic sales and operating profits, and manufacturing employment fell 1% in the Quarter 2 Labour Force Survey.

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