Johannesburg – South Africa’s metals and engineering sector is heading into 2026 under mounting pressure, with weak demand, rising electricity tariffs and global trade tensions threatening recovery.
This is according to the latest State of the Metals and Engineering Sector Report 2026 released by the Steel and Engineering Industries Federation of Southern Africa, which represents more than 1 300 companies employing over 140 000 people.
Sector production declined by 1.6 percent in 2025, following a 1.4 percent drop in 2024. Employment also fell by 0.43 percent, signalling ongoing strain despite stabilised electricity supply.
SEIFSA Chief Executive Officer Tafadzwa Chibanguza said the core structural constraint remains insufficient demand.
“The production capacity exists, but the weak economic environment means that there is no demand,” he said.
Escalating electricity tariffs have emerged as a dominant cost risk, while deteriorating municipal services are adding further operational burdens. At the same time, heightened industrial policy in major economies is increasing the risk of trade friction and limiting export potential.
Although South Africa exited the Financial Action Task Force greylist and received a sovereign upgrade from S&P Global Ratings in late 2025, SEIFSA cautions that fiscal constraints continue to limit large-scale infrastructure expansion.
The federation argues that structured public-private partnerships and improved project bankability will be critical to stimulating demand and supporting reindustrialisation in the year ahead.
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