South African clothing and textile manufacturing industry continues to decline
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Category: Economics and manufacturing
Date: 20 October 2022 South Africa's clothing and textile manufacturing industry has been in massive decline since the dawn of democracy. The reason? Well cheap clothing and textile imports from countries such as China, India, Pakistan and Vietnam has killed the local clothing and textile manufacturing industry.
The South African clothing and textiles industry just cannot compete against cheap clothing and textile imports from mostly Asian countries. |
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Clothing, footwear and textiles manufacturing industry in SA in decline for decades
The image below shows the rand value of manufacturing sales of textiles, clothing and footwear since the start of 1998 (the blue line). While the Rand value of manufacturing sales of the industry has increased, one has to remember that inflation plays a big part in the raw rand value of sales. To get a better understanding of the underlying performance of the industry one needs to compare it to total manufacturing sales over time.
The red line shows the contribution of textiles, clothing and footwear to total manufacturing sales over time. In 1998 the industry accounted for about 8% of total manufacturing sales. By August 2022, this has declined to about 2% of total manufacturing sales. This shows the industry has been in decline and losing relative importance in the manufacturing industry for decades.
The red line shows the contribution of textiles, clothing and footwear to total manufacturing sales over time. In 1998 the industry accounted for about 8% of total manufacturing sales. By August 2022, this has declined to about 2% of total manufacturing sales. This shows the industry has been in decline and losing relative importance in the manufacturing industry for decades.
Manufacturing of textiles, clothing and footwear in South Africa and its contribution to total manufacturing in South Africa
So why is the clothing, footwear and textiles manufacturing industry in South Africa struggling so much? Especially considering an ever expanding population that requires clothing and footwear. Well as mentioned in the introduction, imports are playing a major part in the decline of this industry. When South Africa became a democracy and trade sanctions were lifted against South Africa, firms took the opportunity to import textiles from other countries (mostly Asian countries) at a lot cheaper prices than what can be acquired locally. Therefore boosting profit margins of clothing and textile firms.
Currently the value of clothing, footwear and textiles being imported is greater than the value of clothing, footwear and textiles manufactured in South Africa. According to Statistics South Africa clothing, footwear and textiles manufacturing sales amounted to R5.75 billion while the customs data from SARS shows that R5.973 billion worth of clothing, footwear and textiles was imported during August 2022. The bubble chart below shows where these imports came from. The size of the bubble shows the relative size of each country's contribution to our clothing, footwear and textile imports.
Currently the value of clothing, footwear and textiles being imported is greater than the value of clothing, footwear and textiles manufactured in South Africa. According to Statistics South Africa clothing, footwear and textiles manufacturing sales amounted to R5.75 billion while the customs data from SARS shows that R5.973 billion worth of clothing, footwear and textiles was imported during August 2022. The bubble chart below shows where these imports came from. The size of the bubble shows the relative size of each country's contribution to our clothing, footwear and textile imports.
The bubble chart below shows that China is by far the biggest contributor to South Africa's clothing, footwear and textile imports. India, Pakistan, Bangladesh, Indonesia, Japan, Turkey, Vietnam, Cambodia, South Korea, Taiwan are some of the other Asian countries (dark orange bubbles) that contributes a lot to South Africa's clothing, footwear and textile imports.
Some of the African countries that accounts for South Africa's imports of clothing, footwear and textiles include Madagascar, Mauritius, Swaziland and Lesotho.
The light orange bubbles shows European countries from which South Africa imports clothing, footwear and textiles. The big European contributors are Germany, Italy, Netherlands (usually just a hub through which other European countries export to other countries), United Kingdom, Spain and Portugal.
While we do import from a host of countries across the world, the dark orange bubbles (Asia) clearly dominates South Africa's imports of clothing, footwear and textiles. And we predict that this trend will continue to grow and South Africa's clothing, footwear and textiles manufacturing sector will continue to decline in years to come.
Some of the African countries that accounts for South Africa's imports of clothing, footwear and textiles include Madagascar, Mauritius, Swaziland and Lesotho.
The light orange bubbles shows European countries from which South Africa imports clothing, footwear and textiles. The big European contributors are Germany, Italy, Netherlands (usually just a hub through which other European countries export to other countries), United Kingdom, Spain and Portugal.
While we do import from a host of countries across the world, the dark orange bubbles (Asia) clearly dominates South Africa's imports of clothing, footwear and textiles. And we predict that this trend will continue to grow and South Africa's clothing, footwear and textiles manufacturing sector will continue to decline in years to come.