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DIRECTORATE: AGRO-PROCESSING SUPPORT
agriculture,forestry & fisheries
Annual Economic Review of
the Agro-processing industry
in South Africa.
2018 ________________________________________________________________
Volume 3, number 1
Contents
PREFACE ............................................................................................................................. i
EXECUTIVE SUMMARY ....................................................................................................... ii
1. INTRODUCTION .......................................................................................................... 1
2. THE AGRO-PROCESSING INDUSTRY ......................................................................... 2
3.1 FOOD PRODUCTS ....................................................................................................... 3
3.2 BEVERAGES .................................................................................................................. 6
3.3 TOBACCO ................................................................................................................... 9
3.4 TEXTILES ........................................................................................................................ 9
3.5 WEARING APPAREL .................................................................................................. 12
3.6 LEATHER AND LEATHER PRODUCTS ......................................................................... 15
3.7 FOOTWEAR ................................................................................................................ 18
3.8 WOOD AND WOOD PRODUCTS ............................................................................. 20
3.9 PAPER AND PAPER PRODUCTS ............................................................................... 24
3.10 RUBBER PRODUCTS ................................................................................................. 26
3.11 FURNITURE ................................................................................................................ 29
4. CONCLUSION .............................................................................................................. 32
REFERENCES ..................................................................................................................... 33
LIST OF ACRONYMS
DAFF Department of Agriculture, Forestry and Fisheries
GDP Gross Domestic Product
SA South Africa
IPAP Industrial Policy Action Plan
FAO Food and Agriculture Organization.
i
PREFACE
The agro-processing industry is among the sectors identified by the IPAP of the New Growth
Path and the National Development Plan for its potential to spur growth and create jobs
because of its strong backward linkage with the primary agricultural sector. DAFF established
a Directorate: Agro-processing Support in 2011 to complement the interventions undertaken
by several governmental departments, notably, the Department of Trade and Industry. One
of the main purposes of the directorate is to provide timely and updated economic
information regarding agro-processing industry in order to monitor the performance of the
sector and provide an insight into the effects of economic policies and exogenous factors. To
achieve this purpose, the Directorate: Agro-processing Support publishes regular annual
review of the agro-processing industry.
This publication Annual Economic Review of the Agro-processing Industry in South Africa by
the directorate evaluates the economic performance of the 11 agro-processing divisions
during 2018. These divisions, which are in line with the Standard Industrial Classification, are
food products, beverages, tobacco, textiles, wearing apparel, leather and leather products,
footwear, wood and wood products, paper and paper products, rubber products and
furniture. The main economic indicators reviewed are the changes in the volume of
production, sales, trade, utilization capacity and employment.
Any comments and suggestions on the content of the publication are most welcome.
Mahlogedi Victor Thindisa
Director: Agro-processing Support
Pretoria
ii
EXECUTIVE SUMMARY
As the global economy moderated in growth in 2018, the South Africa’s GDP moderated by
0.8% in 2018 from a 1,4% growth recorded in 2017. The slowdown in the economy is as a result
of a slowdown in the agricultural sector which declined in the first two consecutive quarters of
2018. The decline in agricultural output was due to the decline in production of horticultural
goods.
In 2018, the seasonally adjusted volume of production for the following divisions of the agro
processing sector grew as compared to the last year: food (4,7%), beverages (3,9%). However,
for footwear and paper and paper products division it rebounded by 2,4% and 1,3%
respectively, while for wood and wood products, textiles and leather and leather products
division it decelerated by 5,2%, 3,8% and 4,8%, respectively, in 2018. The volume of production
for rubber and furniture divisions contracted by 2,6% and 2,8%, while for wearing apparel
division it improved from its previous contraction of 4,2% to a 3,3% negative growth in 2018.
The following divisions’ seasonally adjusted value of sales moderated in growth during 2018:
textiles (0,8%), wearing apparel (1,6%), leather and leather products (2,7%), footwear (3,2%),
wood and wood products (2,6%), paper and paper products (5,2%). However, sales for rubber
and furniture divisions contracted by 5,0% and 8,9%, respectively. Sales for food and beverages
divisions grew by 7,3% and 6,3%, respectively in 2018.
The agro processing sector trade deficit widened from R11 222,3 million in 2017 to R12 691,7
million in 2018 which represents an increase of about 13,0% in 2018 from a 2,4% growth in 2017.
The following divisions’ trade deficit widened in 2018 as compared to 2017: furniture (R992,7
million), rubber (R397,2 million), footwear (R1 261,7 million), leather and leather products
(R161,3 million), wearing apparel (R5 476,5 million), textiles (2 166 million) and food (R2 513,9
million). However, tobacco and beverages divisions’ trade surplus narrowed by R270,3 million
and R237,4 million, respectively, in 2018, while wood and wood products division’s trade surplus
widened to R583,9 million during the current period of review.
During 2018, the agro processing sector employment rebounded by 1,6% from a 0,1%
contraction recorded in 2017. This represents a number of 455 687 jobs in 2018 as compared
to a 451 710 jobs in 2017, which translates to 3 976 more jobs created in the sector in 2018. The
following divisions shed jobs during the period: paper and paper products (1 919), textiles (1
420), wearing apparel (842), leather and leather products (130) and wood and wood products
(118). However, furniture, food, footwear and rubber divisions created jobs by 4 920, 1 638, 595
and 514 respectively in 2018.
1
1. INTRODUCTION
The global economic growth moderated in 2018. Similarly, the South African economy realised
a moderate growth in 2018, mainly as a results of contraction in output of agriculture and
mining. This annual review analyses the economic performance of the agro-processing
industry as the South African economy moderated in 2018.
The annual review is organized as follows: the first section presents an, overview of the state
of the domestic economy, to provide an insight into the growth in domestic demand, which is
largely determined by a firm growth of the economy, employment and inflation. The second
section gives a brief effect of the global and domestic economic situation on the 11 divisions
of the agro-processing industry and lastly, it the conclusion. The variables that are analysed in
the review are the volume of production, sales, trade, employment and utilisation capacity of
the 11 agro-processing divisions.
2. THE STATE OF THE DOMESTIC ECONOMY
Table 3.1 shows that the South African economic growth moderated by 0.8% in 2018 as
compared to a 1,4% growth in 2017. The slowdown in the economy is notably in the agricultural
sector which declined in the first two consecutive quarters of 2018. The decline in agricultural
output was due to the decline in production of horticultural goods. The manufacturing sector
bounced back by 1,0% from a 0,2% contraction in 2017. Mining sector declined also in the third
and fourth quarter of 2018 resulting in a decline in 2018 output as compared to a 4,2% growth
noted in 2017(South African Reserve Bank, 2019).
Table 3.1: South African economic growth rate (percentage change at seasonally adjusted annualized
rates)
2017 2018
Sector Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR
Primary sector 19.7 5.8 8.0 -16.4 -7.3 -4.0 -1.1 -2.5
Agriculture 47.8 44.9 21.1 -33.7 -42.3 13.7 7.9 -4.8
Mining 11.7 -5.5 4.2 -9.1 5.1 -8.9 -3.8 -1.7
Secondary
sector
1.3 4.1 -0.2 -6.2 1.3 4.9 3.0 0.5
2
Manufacturing 3.4 6.0 -0.2 -8.4 1.4 7.5 4.5 1.0
Tertiary sector 1.2 2.8 1.0 0.4 -0.1 2.9 1.7 1.3
Non primary
sector
1.2 3.1 0.7 -1.1 0.2 3.3 2.0 1.1
Non-
agricultural
sector
2.1 2.3 1.0 -1.8 0.8 2.2 1.5 0.9
Total 2.8 3.4 1.4 -2.7 -0.5 2.6 1.4 0.8
Source: Reserve Bank (2019)
2. THE AGRO-PROCESSING INDUSTRY
The FAO (1997) defines agro-processing as a subset of manufacturing that processes raw
materials and intermediate products derived from the agricultural sector. Therefore, the agro-
processing industry basically transforms products originating from agriculture, forestry and
fisheries. According to the Standard Industrial Classification, the agro-processing industry
comprises the following 11 divisions: food products, beverages, tobacco, wearing apparel,
leather and leather products, footwear, paper and paper products, wood and wood
products, rubber and furniture.
3
3.1 FOOD1 PRODUCTS
Source: Statistics SA (2019)
Figure 1 above depicts volume of production in the food division of the agro-processing sector.
During 2018, output in the meat, fish, fruit etc., and dairy products grew by 4,1% and 5,0% from
a 1,4% and 1,7% growth recorded in the previous year, respectively. The output of grain mill
products, on the other hand, rebounded by 3,6% in 2018 following a 5,3% contraction
registered in 2017, while output of ‘’other food products’’ stagnated at 5,8% in 2018 as
compared to last year’s growth. The output of food products division a whole grew by 4,7% in
2018 .
1 Food products in this case will include meat, fish, fruit etc., dairy products, grain mill products and other food
products.
0
20
40
60
80
100
120
Ind
ex 2
015 =
100
Figure 1: Average Annual seasonally adjusted volume of production:
Food products 2018
Meat , fish, fruit etc. Dairy products Grain mill products Other food products
4
Source: Statistics SA (2019)
Figure 2 above shows the seasonally adjusted value of sales of food products division which is
comprised of meat, fish, fruit etc., dairy products, grain mill products and ‘’other food
products’’. In 2018 meat, fish, fruit etc., dairy products, grain mill products and ‘’other food
products’’ grew by 7,4%, 7,0%, 7,3% and 7,3% from a 1,2%, 0,6%, 1,5% and 4,4% growth in 2017,
respectively. The value of sales for food products division as a whole grew by 7,2% in 2018.
Source: Trade map (2019)
In 2018, food imports contracted by 3,6% as compared to a 6,5% growth in the previous year.
However, food exports rebounded by 2,8% in 2018 following a 3,5% growth in 2017 (see Figure
0
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20000
30000
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50000
60000
R m
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nFigure 2: Food sales at current prices, 2018
Dairy products Grain mill products Other food products Meat , fish, fruit etc.
0
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12000
14000
16000
18000
R m
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Figure 3: Annual trade perfomance for food products, 2018
Imports Exports
5
3). As a result of contraction in food imports coupled with a rebound in food exports, trade
deficit of the food division narrowed from R3 410, 1 million in 2017 to R2 513,9 million in the 2018..
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 82.0 18.0 2.1 1.3 0.3 10.3 4.1
2017 81.7 18.3 2.3 1.4 0.4 10.9 3.4
2018 81.1 18.9 1.9 1.3 0.4 11.0 4.3
Source: Statistics SA (2019)
The utilization of production capacity by large enterprises in the food products division
declined in 2018 as compared to the previous year. The decline was by 0.6 percentage points.
Insufficient demand was the main reason for underutilisation during 2018, followed by other
reasons such as seasonal factors (see Table 4.4).
Source: Statistics SA (2019)
Figure 4 above depicts employment in the food division during 2018. Employment in the meat,
fish, fruit, vegetables, oils and fats; and grain mill products, starches and starch products
rebounded by 2,5% in 2018 from a 3,7% growth in the preceding year. However, the
0
20000
40000
60000
80000
100000
120000
Nu
mb
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of
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Figure 4: Average Annual employment: Food products, 2018
Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats
Dairy products
Grain mill products, starches and starch products and prepared animal fat
Other food products
6
employment in the dairy products division contracted by 1,7% in 2018 from a 3,3% growth in
2017,while employment in grain mill products division rebounded by 1,4% in 2018 from a 2,4%
growth in 2017. The employment in ‘’Other food products’’ division grew by 8,9% in 2018 from
a 7,7% growth in 2017. The employment in the food products division as a whole grew by 3,3%
in 2018 from a 2,2% growth in the previous year, which represents about 6 555 jobs created in
2018 as compared to 4 317 jobs created in the preceding year.
3.2 BEVERAGES
Source: Statistics SA (2019)
Figure 5 shows the seasonally adjusted volume of production for beverages division. In 2018,
the output of beverages grew by 3,9% following a growth of 1,7% recorded in the preceding
year. Over the past 10 years, though at a slower pace, the average annual seasonal adjusted
volume of production for beverages division depicts an increasing trend.
0
20
40
60
80
100
120
Ind
ex 2
015
=10
0
Figure 5: Average Annual seasonally adjusted volume of production:
Beverages, 2018
Beverages
7
Source: Statistics SA (2019)
Figure 6 above demonstrates the value of sales for beverages division. In 2018, sales of the
beverages division grew by 6,3% as compared to a growth of 4,8% in the previous year. Similar
to growth observed in volume of production, though at a slightly sharper pace, sales of
beverages division have shown an upward trend over the past ten years.
Source: Trade map (2019)
In 2018, beverages exports grew modestly by 8,0% following a growth of 2,8% in the previous
year. However, imports of beverages accelerated by 21,5% in 2018 from a 1,2% growth
recorded in the prevous year. As a result, the trade surplus in the beverages division narrowed
from R2 419,2 million in 2017 to R2 374,5 million in 2018.
0
5000
10000
15000
20000
25000
30000
35000
R m
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nFigure 6: Beverages sales at current prices, 2018
Beverages
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
R m
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n
Figure 7: Annual trade perfomance for beverages, 2018
Imports Exports
8
Table 4.9: Utilisation and reasons for underutilisation of production capacity by large enterprises:
Beverages (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 86.1 13.9 2.1 1.1 0.3 7.1 3.5
2017 84.9 15.1 3.4 0.9 0.3 7.8 2.8
2018 84.3 15.7 3.8 0.8 0.3 7.9 3.0
Source: Statistics SA (2019)
The utilization of production capacity declined by 1,2 percentage points (see Table 4.9). The
main reasons for under-utilization in 2018 are insufficient demand, followed by shortage of raw
materials and other reasons such as seasonal factors. The shortage of raw materials was due
in part by the drought experienced in 2018.
Source: Statistics SA (2019)
Figure 8 above shows the number of employment in the beverages and tobacco division from
2010 to 2018. During 2018, the number of employment in the beverages and tobacco
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Figure 8: Average annual employment: Beverages and tobacco products,
2018
Beverages and tobacco products
9
contracted by 4,2% as compared to a 0,9% growth in the previous year. As a result 1 796 jobs
were shed in 2018 as compared to 398 jobs created in 2017.
3.3 TOBACCO
Source: Trade map (2019)
During 2018, tobacco imports grew marginally by 7,7% as compared to a 6,5% growth in 2017.
Tobacco exports, on the other hand, contracted by 13,5% in 2018 from a 2,2% growth in the
preceding year. Over the period 2010 to 2018, South Africa has enjoyed a favourable trade
balance in tobacco, however it has narrowed down subsequent to 2015 (see Figure 9).
3.4 TEXTILES
Source: Statistics SA (2019)
0
100
200
300
400
500
600
700
800
R m
illio
n
Figure 9: Annual trade perfomance for tobacco, 2018
Imports Exports
0
20
40
60
80
100
120
140
Ind
ex 2
015
=1
00
Figure 10: Average Annual seasonally adjusted volume of production:
Textiles 2018
Textiles Other textile products
10
During 2018, the volume of production for textiles division contracted by 3,5% from a growth of
0,1% recorded in the previous year. ‘’Other textile’’ on the other hand, rebounded by 0,4% in
2018 as compared to a 1,2% contraction in 2017. The divisions combined decelerated by 3,8%
from a 1,7% recorded in the previous year.
Source: Statistics SA (2019)
Figure 11 above depicts the value of sales for textile division. During 2018, sales in the textile
division moderated by 0,9% as compared to a growth of 4,4% growth in the previous year.
Similarly, ‘’other textiles products’’ moderated by 0,8% from a growth of 4,8% in the previous
year. The value of sales for textile division as a whole moderated by 0,9% in 2018 following a
4,6% growth in 2017.
Source: Trade map (2019)
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
R m
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n
Figure 11: Textiles sales at current prices, 2018
Textiles Other textile products
0
500
1000
1500
2000
2500
3000
3500
4000
4500
R m
illio
n
Figure 12: Annual trade perfomance for textiles, 2018
Imports Exports
11
In 2018, textiles imports rebounded by 5,2% from a 0,7% contraction in the previous year.
However, textile exports contracted by 1,4% in 2018 as compared to a 7,4% growth registered
in the previous year. As a result, the trade deficit has widened from R1 941,2 million in 2017 to
R2 166,5 million in 2018. Therefore, textile imports continue to increase at an increasing rate
while exports appear to be stagnated (see Figure 12).
Table 4.18: Utilisation and reasons for underutilisation of production capacity by large enterprises: Textiles
(percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 68.6 31.4 1.3 0.8 0.0 26.1 3.2
2017 65.7 34.3 1.7 0.5 0.0 28.8 3.3
2018 66.4 33.6 1.7 0.6 0.0 28.0 3.4
Source: Statistics SA (2019)
Table 4.18 illustrates the utilization capacity by large enterprises in the textiles division. The
utilisation capacity increased by 0,7 percentage points in 2018. Insufficient demand remains
the main reason for underutilization in 2018, followed by other reasons such as a decline in
production volume.
Source: Statistics SA (2019)
0
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15000
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25000
30000
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Figure 13: Average annual employment: textiles, 2018
Preparation and spinning of textile fibres; weaving of textiles Other textiles
12
Figure 13 above shows the annual employment growth in the textiles division in 2018. The
number of employment in the whole textiles division decelerated by 9,1% in 2018 from a 4,1%
contraction registered in the previous year. As a result the textiles division as a whole shed 2
841 more jobs in 2018 as compared to 1 341 jobs in the previous year.
3.5 WEARING APPAREL
Source: Statistics SA (2019)
During 2018, the volume of production in the knitted, crocheted articles division experienced
an improved negative growth of 1,8% as compared to the contraction of 1,8% recorded in
previous year. Output in the wearing apparel division also improved its negative growth by
5,0% in 2018 from 7,6% in the previous year. The divisions combined registered a better negative
growth of 3,3% in 2018 as compared to a 4,2% growth registered in the preceding year.
Production in the knitted, crocheted articles division has been declining since 2010 until 2018.
Wearing apparel on the other hand, was highest in 2009 and lowest in 2017 (see Figure 14).
0
20
40
60
80
100
120
140
160
180
200
Ind
ex 2
015 =
100
Figure: 14 Average annual seasonally adjusted volume of production:
wearing apparel 2018
Knitted, crocheted articles Wearing apparel
13
Source: Statistics SA (2019)
In 2018, sales in the wearing apparel division moderated by 1,7% following a growth of 4,2% in
the previous year. Similarly, knitted, crocheted articles sales moderated by 1,5% in 2018 from a
growth of 4,2% in the previous year. From the period of 2009 to 2018, there was an increase in
sales in the wearing apparel division. However, the knitted, crocheted article sales were lower
as compared to wearing apparels (see Figure 16).
Source: Trade map (2019)
0
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4000
6000
8000
10000
12000
14000
16000
18000
R m
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nFigure 15: Wearing apparel sales at current price, 2018
Knitted, crocheted articles Wearing apparel
0
1000
2000
3000
4000
5000
6000
7000
8000
2010 2011 2012 2013 2014 2015 2016 2017 2018
R m
illio
n
Figure 16: Annual trade perfomance for wearing apparel: 2018
Imports Exports
14
During 2018, the wearing apparel division imports and exports rebounded by 8,9% and 0,8% as
compared to a 4,6% and 0,5% contraction in the preceding year, respectively. As a result, the
trade deficit widened to R5 476,5 million in 2018 from R4 911,7 million in 2017. It can be noted
from the graph that imports of wearing apparel division have been higher than exports from
2010 to 2018 (see Figure 16).
Table 4.23: Utilisation and reasons for underutilisation of production capacity by large enterprises:
Wearing apparel (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 77.5 22.5 0.7 1.4 0.4 16.7 3.4
2017 75.8 24.2 0.6 1.4 0.4 18.4 3.6
2018 75.3 24.7 0.6 1.4 0.4 18.8 3.5
Source: Statistics SA (2019)
Table 4.23 above shows that the utilization capacity declined in 2018. It declined by 0,5
percentage points. Insufficient demand still remains the main reason for underutilisation of
production capacity during 2018, followed by other reasons such as lower productivity.
Source: Statistics SA (2019)
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20000
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60000
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Figure 17: Average Annual employment : Wearing apparel 2018
Knitted and crocheted fabrics and articles
Wearing apparel, except fur;dressing and dying of fur, articles of fur
15
During 2018, the Knitted and crocheted fabrics and articles and wearing apparel divisions
combined, registered an improved negative growth of 3,7% as compared to a 4,6%
contraction registered in 2017. As a result, 1 685 more jobs were shed as compared to 2 214
jobs shed in the previous year (see Figure 17).
3.6 LEATHER AND LEATHER PRODUCTS
Source: Statistics SA (2019)
Figure 18 above illustrates the seasonally adjusted volume of production in the leather and
leather products division. During 2018, the output in the leather and leather products division
decelerated by 4,8% from a 4,0% contraction in the previous year. In 2014, production in
leather and leather products was at peak, then started declining until the year under review.
Source: Statistics SA (2019)
0
20
40
60
80
100
120
Ind
ex 2
015 =
100
Fihure 18: Average Annual seasonally adjusted volume of production:
Leather and Leather products 2018
Leather and leather products
0
2000
4000
6000
8000
10000
12000
14000
16000
R m
illio
n
Figure 19: Leather and leather products sales at current price, 2018
Leather and leather products
16
Figure 19 above presents the value of sales in the leather and leather products division. During
2018, the seasonally adjusted value of sales in the leather and leather products division
moderated by 2,7% following a 4,8% growth in the preceding year. Furthermore, over the
period 2009 to 2018, sales of leather and leather products continue to increase.
Source: Trade map (2019)
In 2018, the leather and leather products division imports rebounded by 2,0% from a 5,8%
contraction registered in 2017. However, exports of leather and leather products decelerated
by 4,3% in 2018 as compared to a 0,6% contraction in the last year. As a result, the trade deficit
widened to R161,3 million in 2018 from R104,4 million in 2017. Imports of leather and leather
products division have been higher as compared to exports during 2018(see Figure 20).
Table 4.28: Utilisation and reasons for underutilisation of production capacity by large enterprises: Leather
and leather products (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 74.4 25.7 4.5 0.6 1.3 17.7 1.6
2017 72.8 27.2 4.7 0.7 1.3 18.8 1.9
0
200
400
600
800
1000
1200
R m
illio
n
Figure 20: Annual trade perfomance for leather and leather products:
2018
Imports Exports
17
2018 71.2 28.8 4.8 0.6 1.2 20.7 1.6
Source: Statistics SA (2019)
The utilization of production capacity in the leather and leather products division decreased
during the period under review. It decreased by 1,6 percentage points (see Table 4.28).
Insufficient demand remained the main reason for underutilisation, followed by shortage of
raw materials.
Source: Statistics SA (2019)
Figure 21 above illustrates the average annual employment for leather and leather products
division in 2018. The number of employment in leather and leather products division
contracted by 2,5% in 2018 from a 4,5% growth registered in the previous year. As a result, 130
jobs were lost in the division in 2018 as compared to a 228 jobs created in 2017
0
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2000
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6000
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Figure 21: Average Annual employment: Leather and leather products
2018
Leather and leather products
18
3.7 FOOTWEAR
Source: Statistics SA (2019)
Figure 22 above shows the seasonally adjusted volume of production in the footwear division.
In 2018, the volume of production for footwear division rebounded by 2,4% as compared to a
6,0% contraction in the previous year. The volume of production for footwear division has been
characterized by fluctuating over the past ten years, which peaked in 2014, while the
recorded low volume of production was in 2017.
Source: Statistics SA (2019)
88
90
92
94
96
98
100
102
104
Ind
ex 2
015
=10
0
Figure 22: Average Annual seasonally adjusted volume of production:
Footwear 2018
Footwear
0
2000
4000
6000
8000
10000
12000
14000
16000
R m
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n
Figure 23: Footwear sales at current prices, 2018
Footwear
19
The seasonally adjusted value of sales in the footwear division in 2018 moderated by 3,2% as
compared to a growth of 4,2% in the preceding year. The value of sales for footwear division
was approximately R13 371 million in 2018 (see Figure 23).
Source: Trade map (2019)
In 2018, the footwear imports rebounded by 12,7% as compared to a 13,8% growth in the
preceding year. The exports of footwear, on the other hand, contracted by 4,3% in 2018 as
compared to a 3,6% growth registered in the previous year. As result, the trade deficit widened
from R1 064,4 million in 2018 to R 1 261,7 million in 2018 (see Figure 24).
Table 4.33: Utilisation and reasons for underutilisation of production capacity by large enterprises:
Footwear (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 84.4 15.6 2.0 0.9 0.0 12.7 0.0
2017 84.3 15.7 2.0 0.9 0.0 12.6 0.3
2018 87.1 13.0 1.3 0.5 0.0 11.2 0.0
Source: Statistics SA (2019)
0
200
400
600
800
1000
1200
1400
1600
1800
R m
illio
n
Figure 24: Annual trade perfomance for footwear
:2018
Imports Exports
20
The utilization of production capacity in the footwear division declined by 2,8 percentage
points in 2018 (see Table 4.33). Insufficient demand remained the key reason for underutilisation
during the period, followed by shortage of raw material.
Source: Statistics SA (2019)
Figure 25 above shows annual employment in footwear division. In 2018, the employment in
the footwear division grew by 6,7% from a 1,2% growth in the previous year. This resulted in 595
jobs created in the division as compared to 112 jobs in the last year.
3.8 WOOD AND WOOD PRODUCTS
Source: Statistics SA (2019)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Nu
mb
er
of
em
plo
ym
en
t
Figure 25: Average Annual employment: Footwear 2018
Footwear
0
20
40
60
80
100
120
Ind
ex 2
015 =
100
Figure 26: Average Annual seasonally adjusted volume of production:
wood 2018
Sawmilling and planing of wood Products of wood
21
During 2018, the seasonally adjusted volume pf production in the products of wood division
rebounded b 2,4% from a 3,4% contraction in the previous year. The volume of production for
sawmilling and planning of wood, on the other hand, contracted by 5,5% in 2018 following a
2,1% growth registered in the preceding year. The division a whole decelerated by 5,2% in 2018
(see Figure 26).
Source: Statistics SA (2019)
As shown in Figure 27, the value of sales for sawmilling and planning of wood division
moderated by 1,9% in 2018 from a 4,4% growth in the previous year. Similarly, sales for products
of wood moderated by 3,4% in 2018 as compared to a 6,1% growth registered in the preceding
year. The divisions combined moderated by 2,6% in 2018 following a 5,2% in the preceding
year. Sales in both sawmilling and planning of wood and products of wood showed an
increase during the period from 2009 to 2018.
0
2000
4000
6000
8000
10000
12000
14000
R m
illio
n
Figure 27: Wood and wood products at current sales, 2018
Sawmilling and planing of wood Products of wood
22
Source: trade map, 2019
In 2018, imports of wood and wood products rebounded by 3,9% from a 5,4% growth in the
last year. However, exports of wood and wood products, on the other hand, rose by 7,3% in
2018 following a 1,8% growth in the previous year. As a result, the trade surplus widened from
R504,3 million in 2017 to R 583,9 million in 2018 (see Figure 28).
Source: Statistics SA (2019)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
R m
illio
nFigure 28: Annual trade perfomance for wood and wood products: 2018
Imports Exports
0
5000
10000
15000
20000
25000
30000
Nu
mb
er
of
em
plo
ym
en
t
Figure 29: Average Annual employment : wood and wood products: 2018
Sawmilling and planing of wood Products of wood, cork, straw and plaiting materials
23
During 2018, the sawmilling and planning of wood division and products of wood etc. division
combined registered an improved negative growth of 0,5% following a contraction of 5,1%
registered in the previous year. As a result, the division shed 236 jobs during the period under
review as compared to a 2 288 jobs shed in 2017 (see Figure 29).
Table 4.38: Utilisation and reasons for underutilisation of production capacity by large enterprises: Wood
and wood products (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi
and
unskilled
2016 85.1 14.9 1.5 1.1 0.0 7.8 4.6
2017 84.2 15.9 1.5 0.9 0.0 8.9 4.6
2018 82.7 17.3 1.6 0.9 0.0 9.1 5.8
Source: Statistics SA (2019)
Table 4.38 shows that the utilization capacity for wood and wood products division declined
during 2018. The decline is about 1,5% percentage points . Insufficient demand remained the
key reason for underutilisation during the period under review, followed by other reason such
as lower productivity.
24
3.9 PAPER AND PAPER PRODUCTS
Source: Statistics SA (2019)
Figure 30 above shows the volume of production in the paper and paper products division.
The seasonally adjusted volume of production in the paper and paper products division
rebounded by 1,3% in 2018 as compared to 3,5% contraction recorded in the previous year.
Source: Statistics SA (2019)
80
85
90
95
100
105
Ind
ex 2
015 =
100
Figure 30: Average Annual seasonally adjusted volume of production:
Paper and paper products 2018
Paper and paper products
0
2000
4000
6000
8000
10000
12000
R m
illio
n
Figure 31: Paper and paper products sales at current prices, 2018
Paper and paper products
25
During 2018, the value of sales in the paper and paper products division moderated by 5,2%
as compared to a 7,2% growth recorded in 2017. Sales of paper and paper products
amounted to about R9 929 million in 2018(see Figure 31).
Source: Trade map (2019)
In 2018, the paper and paper products imports rebounded by 15,8% from a 4,6% growth in the
previous year. Similarly, exports of paper and paper products rebounded by 0,2% in 2018 from
a growth of 1,6% in the previous year. As a result, the trade surplus narrowed from R1 315,4
million in 2017 to R 624,5 million in 2018 (see Figure 32).
Table 4.43: Utilisation and reasons for underutilisation of production capacity by large enterprises: Paper
and paper products (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 87.0 13.0 0.6 1.5 0.3 5.6 5.0
2017 87.1 12.9 0.6 1.3 0.0 6.0 5.1
2018 86.5 13.6 0.9 1.4 0.0 6.3 5.0
Source: Statistics SA (2019)
0
1000
2000
3000
4000
5000
6000
7000
R m
illio
n
Figure 32: Annual trade perfomance for paper and paper products:
2018
Imports Exports
26
The utilization of production capacity by large enterprises in the paper and paper products
division declined by 0.6 percentage points in 2018 (see Table 4.43). Insufficient demand
remained the main reasons for underutilisation of production capacity, followed by other
reasons such as seasonal factors.
Source: Statistics SA (2019)
During 2018, the employment in the paper and paper products division contracted by 5,1%
following a growth of 0,1% in the preceding year. This resulted in 1,919 jobs shed in the division
during the period under review as compared to 46 jobs created in 2017 (see Figure 33).
3.10 RUBBER PRODUCTS
Source: Statistics SA (2019)
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Nu
mb
er
of
em
plo
ym
en
t
Figure 33: Average Annual employment :Paper and paper products 2018
Paper and paper products
0
20
40
60
80
100
120
Ind
ex 2
015 =
100
Figure 34: Average Annual seasonally adjusted volume of production:
Rubber 2018
Rubber products
27
As shown in Figure 34 above, the volume of production in the rubber division contracted by
2,6% in 2018 from a 1,2% growth in 2017. The volume of production in the rubber division was
highest in 2011, however, it has shown flat growth thereafter.
Source: Statistics SA (2019)
Figure 35 above demonstrates the seasonally adjusted value of sales in the rubber products
division. In 2018 the value of sales in rubber products division grew by 5,0% as compared to a
4,8% growth in the preceding year. The sales of rubber products reached about R2 719 million
in 2018 (see Figure 35).
Source: Trade map (2019)
0
500
1000
1500
2000
2500
3000
3500
R m
illio
n
Figure 35: Rubber sales at current prices, 2018
Rubber products
0
1000
2000
3000
4000
5000
6000
7000
R m
illio
n
Figure 36: Annual trade perfomance for rubber products products: 2018
Imports Exports
28
During 2018, the imports of rubber products rebounded by 7,0% as compared to a 0,8% growth
in the preceding year. However, rubber products exports grew by 2,3% in 2018 from a growth
of 0,2% in the previous year (see Figure 36).South Africa has a trade deficit in rubber products
division, which continue to widened as imports increase while exports appear stagnate (see
Figure 36),
Table 4.48: Utilisation and reasons for underutilisation of production capacity by large enterprises: Rubber
products (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 84.2 15.8 0.5 0.9 0.0 12.3 2.2
2017 83.8 16.2 0.4 2.8 0.0 11.2 2.0
2018 84.1 16.0 0.4 2.6 0.0 10.7 2.4
Source: Statistics SA (2019)
The utilization of production capacity for rubber products division rose by 0.3 percentage
points (see Table 4.48). Insufficient demand remains the main reason for underutilisation of
production capacity in the division in 2018, followed by shortage of skilled labour.
Source: Statistics SA (2019)
10500
11000
11500
12000
12500
13000
13500
Nu
mb
er
of
em
plo
ym
en
t
Figure 37: Average Annual employment Rubber products: 2018
Rubber products
29
Figure 37 above illustrates number of employment for rubber products division. In 2018, the
number of employment for rubber products division moderated by 4,2% as compared to a
7,9% growth in the previous year. As a result, 514 more jobs were created in the division in 2018
as compared to 894 jobs in 2017..
3.11 FURNITURE
Source: Statistics SA (2019)
Figure 38 illustrates the volume of production in furniture division. During 2018, production in the
furniture division contracted by 2,8% from a 2,3% growth in 2017. The furniture division volume
of production was lowest in 2009, but reached is peak in 2014.
80
85
90
95
100
105
110
Ind
ex 2
015 =
100
Figure 38: Average Annual seasonally adjusted volume of production:
Furniture 2018
Furniture
30
Source: Statistics SA (2019)
As illustrated in Figure 39, the value of sales in the furniture division contracted by 8,9% in 2018
as compared to a growth of 9,9% in the previous year. Sales for furniture division declined for
about R1 499 million in 2017 to around R1 366 million in 2018 (see Figure 39)
Source: Trade map (2019)
In 2018, the furniture imports rebounded by 8,2% as compared to a 4,8% contraction in the
previous year. However, exports improved its negative growth in 2018 by 2,3% from a 8,3%
0
200
400
600
800
1000
1200
1400
1600
R m
illio
nFigure 39: Furniture sales at current price, 2018
Furniture
0
500
1000
1500
2000
2500
R m
illio
n
Figure 40: Annual trade perfomance for Furniture: 2018
Imports Exports
31
contraction registered in the preceding year. From 2012 to 2018, it is evident that imports of
furniture have been high except in 2010 and 2011.
Table 4.53: Utilisation and reasons for underutilisation of production capacity by large enterprises:
Furniture (percentage)
Period Utilisation Reasons for underutilisation
Total
under-
utilisation
Shortage of Insufficient
demand
Other
Raw
materials
Labour
Skilled Semi and
unskilled
2016 81.5 18.6 1.0 0.3 1.6 15.7 0.0
2017 85.4 14.6 0.9 0.0 1.6 11.9 0.3
2018 86.1 13.9 0.7 0.0 1.4 11.8 0.0
Source: Statistics SA (2019)
During 2018, the utilization capacity of the furniture division grew marginally by 0,7 percentage
points. Insufficient demand was the main reason for underutilisation of production capacity in
2018, followed by shortage of semi and unskilled labour (see Table 4.53).
Source: Statistics SA (2019)
Figure 41 depicts the number of employment for the furniture division in 2018. The number of
employment in the furniture division rebounded by 18,4% in 2018, as compared to a
24000
25000
26000
27000
28000
29000
30000
31000
32000
33000
Nu
mb
er
of
em
plo
ym
en
t
Figure 41: Average Annual employment :Furniture 2018
Furniture
32
contraction of 11,3% in the previous year. As a result 4 920 jobs were created in the division in
2018 as compared to 3415 jobs shed in 2017.
4. CONCLUSION
The global and South African economic growth, respectively, moderated in 2018. The
moderation in economic growth for South Africa was as a results of decline in output of
agriculture and mining. However, the output of manufacturing rebounded in 2018 as
compared to a contraction seen in 2017, while growth of the output of the tertiary sector
slightly accelerated in 2018.
The volume of production for the agro-processing industry rebounded by 0,3% in 2018 from a
contraction of 1,1% in 2017. In 2018, the seasonally adjusted volume of production for food
and beverages grew as compared to the last year. The volume of production for footwear
and paper and paper products division rebounded in growth, while for wood and wood
products, textiles and leather and leather products division it decelerated, respectively, in
2018. The volume of production for rubber and furniture divisions contracted in 2018, while for
wearing apparel division it improved from its negative growth as compared to the preceding
year.
The seasonally adjusted total sales grew by 4,9% in 2018 from a 3,1% growth in the preceding
year. The seasonally adjusted value of sales for textiles, wearing apparel, leather and leather
products, footwear, wood and wood products, paper and paper products moderated during
the period of review. Rubber and furniture divisions contracted, Food and beverages division
grew in 2018.
During 2018, the agro processing sector trade deficit widened from R11 222,3 million in 2017 to
R12 691,7 million in 2018. Furniture, rubber, footwear, leather and leather products, wearing
apparel, textiles and food divisions’ trade deficit widened in 2018. Tobacco and beverages
divisions’ trade surplus narrowed, while wood and wood products division trade surplus
widened.
In 2018, employment in the agro processing sector rebounded by 1,6% from a 0,1% contraction
recorded in 2017. The following divisions shed jobs during 2018: paper and paper products,
textiles, wearing apparel, (leather and leather products) and wood and wood products.
However, furniture, food, footwear and rubber divisions created jobs in 2018.
33
REFERENCES
FAO (1997), the State of Food and Agriculture. Rome: Food and Agriculture Organization.
Reserve Bank (2019), Various Quarterly Economic Reviews. South African Reserve Bank.
Statistics SA (2019), Manufacturing: Utilisation of Production Capacity by Large Enterprises.
Statistics SA: (2019) Volume of production and sales
Statistics SA: (2019), quarterly employment statistics
This document has been compiled by the Department of Agriculture, Forestry and Fisheries and every effort has been
made to ensure the accuracy and thoroughness of the information contained herein and the department cannot be
held responsible for any errors, omissions or inaccuracies in such information and data, whether inadvertent or
otherwise. The Department of Agriculture, Forestry and Fisheries therefore accepts no liability that can be incurred
resulting from the use of this information.
34
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