Research on the Performance of the Manufacturing Sector

Gross fixed capital formation in the SA manufacturing sector

The gross fixed capital formation (GFCF) is used to measure the net additions the (physical) capital stock. Capital is needed in any industry to improve productivity and increase competitiveness. It is also an indicator of long term commitment and a supply driven component in the economy to secure long-term economic growth.

Figure shows the GFCF for the manufacturing industry in SA in constant 2005 prices (at an annualised rate). The data shows that the GFCF increased from around R36 billion in 1990 to around R65.7 billion in 2011, an average increase of less the 1.5% per year over the period. Although the manufacturing GFCF increased at a low rate in rant terms, it decreased as a percentage of total GFCF in SA (from 23.7% in 1990Q1 to 17.2% in 2011Q3) although it recovered slightly from a low of 14.6% at the high of the international financial crisis in 2009Q3).

Figure : Gross fixed capital formation in the manufacturing sector (1990 to 2011)
Source: Data from the SA Resbank

The future growth of manufacturing sub-sectors will depend on the amount of current and historic investment. Table shows the gross capital formation in selected manufacturing sectors for the period 2007 to 2010. Motor vehicles and parts received the highest capital investment (R84 billion in 2010 or almost 32% of manufacturing gross capital formation), followed by special machinery at R57.5 billion in 2010 (or 21.8%). Other sectors that also received relatively high investments are electrical machinery (R25.5 billion in 2010 or 9.7%), office machinery (R22.6 billion or 8.6%) and medical appliances (RR18 billion or 6.9%).

Table : Gross capital formation in manufacturing for 2007 – 2010 (nominal values)

	2007	2008	2009	2010
Meat	-	-	-	-
Fish	-	-	-	-
Vegetables	-	-	-	-
Fruit and nuts	-	-	-	-
Oils and fats	-	-	-	-
Dairy products	-	-	-	-
Grain mill products	-	-	-	-
Starches products	-	-	-	-
Animal feeding	-	-	-	-
Bakery products	-	-	-	-
Sugar	-	-	-	-
Confectionary products	-	-	-	-
Pasta products	-	-	-	-
Food n.e.c.	-	-	-	-
Alcohol, beverages	-	-	-	-
Soft drinks	-	-	-	-
Tobacco products	-	-	-	-
Textile fabrics	-	-	-	-
Made-up textile, articles	15	19	19	19
Carpets	-	-	-	-
Textile n.e.c.	-	-	-	-
Knitting fabrics	-	-	-	-
Wearing apparel	-	-	-	-
Leather products	0	0	0	0
Footwear	-	-	-	-
Wood products	-	-	-	-
Paper products	-	-	-	-
Printing	1	1	1	1
Petroleum products	358	459	460	459
Basic chemicals	-	-	-	-
Fertilizers, pesticides	-	-	-	-
Paint, related products	-	-	-	-
Pharmaceutical products	-	-	-	-
Soap, cleaning, perfume	-	-	-	-
Chemical products, n.e.c.	-	-	-	-
Rubber tyres	2	2	2	2
Other rubber products	-	-	-	-
Plastic products	6	8	8	8
Glass products	0	0	0	0
Non-structural ceramic	10	12	12	12
Structure non-refractory clay	-	-	-	-
Plaster, cement	-	-	-	-
Articles of concrete	-	-	-	-
Non-metallic products n.e.c.	-	-	-	-
Furniture	3 042	5 491	5 380	5 341
Jewellery	-	-	-	-
Manufactured products n.e.c.	807	1 035	1 037	1 034
Wastes, scraps	-	-	-	-
Iron, steel products	-	-	-	-
Non-ferrous metals	172	221	221	221
Structural metal products	191	244	245	244
Tanks, reservoirs	74	95	95	445
Other fabricated metal	36	47	47	47
Engines, turbines	10 213	11 837	10 517	10 510
Pumps, compressors	5 553	7 067	5 354	5 342
Bearings, gears	857	1 299	1 204	1 201
Lifting equipment	1 109	1 609	1 620	1 018
General machinery	6 052	9 011	8 920	8 576
Special machinery	56 272	70 161	61 151	57 491
Domestic appliances	1 134	1 454	1 457	1 453
Office machinery	22 482	28 761	22 399	22 635
Electrical machinery	22 611	28 981	26 036	25 465
Radio, television	3 856	5 661	1 396	2 352
Medical appliances	16 713	22 239	18 538	18 255
Motor vehicles, parts	61 113	83 532	84 252	84 061
Ships and boats	3 150	3 300	2 946	3 031
Railway and trams	2 250	2 800	2 639	2 639
Aircrafts	7 918	12 604	9 964	10 011
Other transport equipment	-	-	-	1 700

Source: Stats SA