The Industrial Policy Era: A New Global Norm and a Domestic Inflection Point
The State of the Metals and Engineering Sector 2026 report provides a comprehensive assessment of the sector’s performance, structural realities, and outlook within a rapidly shifting global and domestic economic environment.
Constituting approximately 25.5% of South Africa’s manufacturing sector, the metals and engineering (M&E) industry remains a foundational pillar of industrial activity spanning upstream steel production, intermediate fabrication, heavy and light engineering, machinery, transport equipment and plastics.
However, 2026 marks a decisive inflection point.
Sector Performance Snapshot
The report highlights several critical indicators:
- Production declined by -1.6% in 2025, continuing a long-term contraction trend.
- Employment has fallen significantly since 2008, with structural erosion averaging approximately -2% annually.
- Capacity utilisation across sub-sectors remains below optimal levels, with basic iron and steel operating at crisis-level conditions (48%).
- Imports have risen sharply while domestic steel production has declined, intensifying competitive pressure.
- Insufficient demand rather than supply constraints remains the dominant factor behind under-utilised capacity.
The sector is not constrained by ability to produce. It is constrained by demand.