Clothing Jobs at Risk as Structural Failures Weigh on Sector, JSE Rallies and Tax Burden Hits Record Highs
South Africa’s clothing and textile industry, one of the country’s most significant labour-intensive employers, faces mounting structural pressures that threaten its ability to create up to 34,000 new jobs, according to newly released research. At the same time, the equity market posted strong gains led by resource stocks, while new analysis shows the personal income tax burden has quietly climbed to record levels. Separately, authorities have moved to curb rising student gambling linked to the misuse of study allowances.
JSE advances on resource gains
The Johannesburg Stock Exchange closed sharply higher on Wednesday, with the FTSE/JSE All Share Index rising 2.60% to 122,517. The benchmark gained 3,107 points and traded within a firm upward range.
Resource stocks led the rally. The Resource 10 index advanced 4.19%, with gains in diversified mining and precious metals counters. The Basic Materials sector climbed 4.17%, while Industrial Metals and Mining rose 4.67%.
Financials also strengthened, with the Financial 15 index up 2.14%. Industrials posted more moderate gains, and property shares edged higher.
Year to date, the All Share Index is up 21.07%, near the upper end of its 52-week range.
The rand traded marginally firmer at 16.05 to the US dollar. Gold held near $4,978 per ounce, and Brent crude traded above $70 per barrel. International markets were mixed, with major U.S. indices near record levels and Asian markets higher.
Textile sector warns of lost opportunity
A demand mapping study conducted by BMA and commissioned by the Localisation Support Fund (LSF) found that energy costs, crime, failing infrastructure and unstable electricity and water supply remain major obstacles for South African garment manufacturers.
The research combined retailer demand analysis with a survey of nearly 200 manufacturers to assess where local demand exists, where capacity is available, and what is required to expand competitively.
Retailers indicated they favour local sourcing to enable faster restocking, greater flexibility, and reduced exposure to global supply chain disruptions. If competitiveness improves, they could source up to 80 million additional garments locally by 2030, valued at about R7.9 billion annually — potentially supporting more than 34,000 jobs across the value chain.
However, systemic constraints continue to block this expansion.
Cheap imports and non-compliance
Manufacturers identified low-cost imports and non-compliant factories as the most significant threat to competitiveness. Illegally imported goods and producers operating outside labour and regulatory standards are seen as undercutting compliant firms.
Smaller businesses are particularly vulnerable, with ultra-low-cost online platforms such as Shein and Temu intensifying price pressure. Many lack the scale to compete on similar margins.
Skills and operational gaps
Skills shortages remain a critical barrier. Seventy percent of manufacturers reported needing support in production management, while shortages were also recorded in technical roles, quality control, and team leadership.
Many firms lack industrial engineering and work-study expertise necessary to improve productivity, indicating that operational capability — not just machinery — is limiting growth.
Costs and infrastructure strain
Rising input costs, limited access to capital, and import duties on certain fabrics further constrain margins. Manufacturers are also investing in backup systems to manage electricity and water disruptions.
Port inefficiencies, deteriorating roads, crime, and unreliable municipal services add to operational costs and delays.
The study concluded that retailer demand for local production exists, but structural reform and coordinated support are required to unlock scale and job creation.
Personal income tax burden reaches record levels
New analysis by PwC shows that South Africa’s personal income tax (PIT) burden has expanded significantly over the past two decades, largely through base broadening rather than higher headline rates.
PIT remains the largest and most stable source of government revenue. The ratio of PIT collections to gross domestic product has risen from roughly 8% in 2001 to a projected level above 10% in the coming year.
According to the analysis, South Africa’s PIT burden as a share of GDP now exceeds the average for middle-income countries and is higher than that of many members of the Organisation for Economic Co-operation and Development.
While headline rates have declined since the early 2000s, effective tax burdens have increased due to narrower deductions and changes to the treatment of employment benefits.
PwC linked the trend to prolonged economic stagnation and rising state expenditure, which have sustained fiscal pressure and recurring budget deficits.
Authorities move to address student gambling
The National Gambling Board and the National Student Financial Aid Scheme (NSFAS) have announced plans to partner in tackling student gambling and protecting study allowances.
The move follows concerns that students are diverting NSFAS stipends, intended for tuition, accommodation, and meals, to online betting platforms.
The two organisations said they will formalise their collaboration through a memorandum of understanding in the coming weeks. Planned interventions include education programmes, campus workshops and awareness campaigns focused on responsible gambling.
In a joint statement, they said the partnership aims to address growing exposure of young people to gambling, particularly illegal online platforms, and to safeguard public funding intended to support academic success.
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