KwaZulu-Natal's manufacturing sector faces ongoing challenges in recovery

Justice Matarutse, senior economist at Spatial Econ, highlights the ongoing challenges faced by KwaZulu-Natal's manufacturing sector, emphasising the need for strategic growth and diversification to overcome the lingering impacts of the Covid-19 pandemic.

KwaZulu-Natal’s manufacturing recovery remains fragile as eThekwini’s economy struggles to regain its pre-Covid footing, with City manufacturing businesses employing fewer workers on average and business confidence slipping back into negative territory.

Successive challenges that range from the Covid-19 lockdown, the July 2021 unrest and the 2022 floods, followed by persistent electricity, water, and logistics problems, are still taking its toll on businesses in the province.

Data presented yesterday by Justice Matarutse, senior economist at Spatial Econ, showed manufacturing confidence declined by 7% quarter on quarter, although it remained 13.87% higher than a year earlier.

Matarutse, speaking at a Nedbank Business and Commercial Banking manufacturing and business breakfast at Mount Edgecombe Country Club, said Spatial Econ’s analysis showed a loss of momentum since the post-lockdown rebound.

The Durban Business Confidence Index , compiled by the University of KwaZulu-Natal’s Macroeconomics Research Unit, also reflected this slump, revealing that confidence fell to 48.82 in the second quarter of 2026, from 50.63 in the first quarter. A reading below 50 signals negative sentiment.

The province exported goods worth R315.6 billion in 2025 and recorded a trade surplus of R100.8 billion, measured in current prices.

When adjusted for inflation, exports were 18% higher than in 2019 but 15% below the peak reached in 2022. Between 2023 and 2025, real exports fell by an average of 5.6% a year, while imports grew by 2.9%.

Spatial Econ cautioned that the customs figures reflected were where goods were declared, not necessarily where they were manufactured.

Matarutse said businesses had endured the Covid-19 lockdown, the July 2021 unrest and the 2022 floods, followed by persistent electricity, water, and logistics problems.

“Our output has obviously been quite low compared to previous years,” he said, warning that eThekwini had still not regained its pre-Covid economic performance.

He said eThekwini data showed manufacturers were employing fewer people, with the ratio of workers to manufacturing businesses down about 16% between 2019 and 2025, even as the number of businesses increased.

As an example of the wider gap, Matarutse said gross value added per employee in Cape Town’s retail sector was almost double the comparable figure for eThekwini.

“We’ve fallen back in terms of productivity in eThekwini,” he said. “We haven’t managed to snap out of the Covid slump in productivity, and we’ve seen that Cape Town is starting to make some gains.”