Where Has All the Growth Gone? South African Manufacturing Industry 1970-2000

At the end of the 1960s, after a half century of rapid industrialisation, South Africa had a relatively advanced and diversified manufacturing sector. By the standards of today's advanced industrial countries, which feature in Gerschenkron's (1952) seminal analysis, South Africa was a very late industrialiser, but it was a very much earlier industrialiser than those East Asian countries which have been the stars of the manufacturing growth firmament since the 1960s.

Since the early 1970s, however, South Africa's manufacturing growth performance has deteriorated greatly, and has been especially poor since the early 1980s. This is the central fact which any account of South Afric an manufacturing in the period 1970-2000 must seek to explain.

An account of how South Africa industrialised in the decades before 1970 is necessary for understanding subsequent developments, and the forces which dislodged South Africa from its earlier, robust growth trajectory. Section 2 thus provides a short description of the main features of South African industrial development from the eve of the First World War through to the beginning of the 1970s. Section 3 deals with developments during the 1970s, a decade notable for the great gold-led commodity price boom which began in 1972; and Section 4 with the period from the early 1980s through to the late 1990s, during which manufacturing output stagnated and employment declined. In the light of the discussion in earlier sections, Section 5 considers some further perspectives on the problems of South African manufacturing over the past thirty years, and their implications for the future sectoral growth path of the economy.