The capacity utilisation of South African large manufacturers slumped to 75.5% in February 2026 from 76.4% in February 2025. This was the lowest since February 2022.
Statistics South Africa said more than half of the reason for the under utilisation was due to insufficient demand.
Economies of scale
Manufacturers aim to have capacity utilisation in excess of 80%. This is because fixed costs such as premises and capital equipment are spread over more products. Consequently, the average cost per unit decreases as the volume of output increases. This allows them to lower prices and gain a competitive advantage.
The recent peak manufacturing capacity utilisation was 84.4% in February 2008. It then eased to the 80% level between February 2010 and February 2020. The national lockdown from March 2020 onwards resulted in the record low of 59.8% in May 2020.
Although there has been a recovery since the pandemic lockdowns, capacity utilisation has trended around the 78% level. It has not been able to exceed the 80% level in the past six years on average.
February 2026 detail
Only two out of ten manufacturing divisions had utilisation above 80% in February 2026.
These were glass and non-metallic mineral products at 82.6% and radio, television and communication apparatus and professional equipment at 81.3%.
Overall, seven of the ten manufacturing divisions showed decreases in utilisation of production capacity in February 2026 compared with a year ago.
Increases were recorded in the petroleum, chemical products, rubber and plastic products division and the glass and non-metallic mineral products division. The motor vehicles, parts and accessories and other transport equipment division was steady at 78.5%.
The largest decreases were recorded in the following divisions: wood and wood products, paper, publishing and printing; basic iron and steel, non-ferrous metal products, metal products and machinery; and electrical machinery.
February manufacturing production
The manufacturing production slump continued in February with a 2.8% year-on-year decline. This was the fourth consecutive year-on-year fall.
Manufacturing production fell by 1.3% in 2025. It is now 7.9% less than 2019. The decline in manufacturing production is in large measure due to the extended period of electricity load shedding, as well as the high electricity prices.
