South Africa’s manufacturing industry remains resilient despite all sorts of challenges
South Africa’s manufacturing industry is facing a range of challenges, including pressure on profit margins, rising costs, and increased financial risks. Despite these obstacles, the industry remains resilient, according to research from PwC.
The latest edition of PwC’s ‘South Africa Manufacturing Analysis’ report highlights the performance of listed manufacturing companies, shedding light on the financial trajectory of the sector, and key levers manufacturers are working on to remain profitable in a rapidly changing landscape.
In 2025, total market capitalisation declined 13.55% year-over-year, from R557.22 billion to R481.72 billion, driven largely by pharma, specialty chemicals, and paper and wood. Gross margins remained comparatively strong, yet operating and net profit margins are trending down said PwC, emphasising the need for tighter cost discipline.
When it comes to profit, containers and packaged foods were a bright spot, delivering high operating profitability compared to other segments in the broader manufacturing landscape.
Industry pressures
A dominant theme in the PwC report is the range of pressures coming at leaders in the sector. Not surprisingly, digital transformation is at the forefront, with automation, AI, and advanced technologies changing the way companies operate and do business.
“A new era of manufacturing is underway. Manufacturers are embracing new technologies such as automation, 3D printing, and AI to boost productivity, efficiency, and agility. Many companies are already using these advancements to reinvent themselves,” said PwC’s researchers in the report.
At the same time, businesses in the sector must also build resilient supply chains by diversifying suppliers, improve sustainability through energy-efficient processes and closed-loop systems, and address challenges such as skills shortages, geopolitical trade tensions, increasing regulations, and growing consumer demands for personalisation.
“Collectively, these pressures make it clear that radical change is no longer optional, but unavoidable,” said Pieter Theron, Industrials and Services Leader for Africa at PwC. “Reinvention must start now, focusing on priorities that respond to the reconfiguration already underway. This means pushing hard towards innovation imperatives that secure competitive advantages in technology and trust and turning obstacles such as climate threats into enablers of growth.”
Nqaba Ndiweni, Consumer, Industrial Products and Services Industry Leader at PwC, highlighted the importance of collaboration across the value chain. “It is no longer just about producing goods; the entire ‘how we make’ ecosystem is evolving, requiring both established and new players to collaborate in innovative ways to overcome shared challenges and seize new opportunities.”
Those who balance running today’s business with shifting to future-proof models will stay at the forefront of the industry, said Theron. “As the sector evolves, building trust through reliable operations, robust governance, and secure digital systems, alongside targeted investments, will enable manufacturers to grow with confidence in the years ahead.”
