Programme Director; Acting Executive Manager: Research, Innovation & Statistics; Productivity SA: Ms Lalane Janse Van Rensburg

Board Member, Productivity SA,  Mr Godfrey Selematsela

Customer Project Management Manager, International Labour Organisation (ILO), Mr Luca Fedi

Economics and Financial Markets Analyst, Advocate Lavan Gopaul         

Productivity SA Acting Chief Economist, Ms Juliet Mashabela

Representatives of Organised Labour; Union Federations and Union Members

Representatives of Business and Members of the Business Community.

Representatives of Government and State-Owned Entities.

My fellow Productivity SA Board members.

Executive Management and Productivity SA staff.

Members of the media.

All stakeholders

Ladies and gentlemen

Good morning

As I welcome you to the release of the National Productivity Statistics for 2025, I would like to take this moment to highlight that the 2025 launch of the National Productivity Statistics by Productivity SA statistics comes at a poignant time for South Africa and Productivity SA.

and the designation of Productivity SA ed as a Centre of Excellence (COEs) by the African Kaizen Initiative(AKI). The Africa Kaizen Initiative  is a joint programme by the African Union Development Agency (AUDA-NEPAD) and the Japan International Cooperation Agency (JICA) that started in 2017 to improve quality and productivity across the African continent through the philosophy of Kaizen. Kaizen, a Japanese term for “continuous improvement,” involves small, incremental changes to increase efficiency, and the AKI promotes this by developing Centers of Excellence, standardizing principles, and creating platforms like the Africa Kaizen Annual Conference (AKAC) for knowledge sharing. The initiative aims to enhance business competitiveness, create jobs, and support inclusive economic growth in Africa.

Key objectives and activities of the African Kaizen Initiative are the improvement of quality and productivity with a key goal to use Kaizen principles to make African businesses more efficient and competitive. The objectives include a fundamental need to strengthen the capacity of African productivity as the African Kaizen Initiative focuses on building capacity through training and establishing Centers of Excellence to spread Kaizen knowledge and support economic growth by improving company competitiveness. The initiative aims to stimulate economic growth and ensure that women, youth, and people with disabilities are included in the workforce. Countries that have thus participating in this projects include countries like Cameroon, Egypt, Ethiopia, Ghana and Zambia.

Examples of the projects by the African Kaizen Initiative include the Quality and Productivity Improvement (QPI).  The South African companies that participated in the project were selected from organisations that form part of the dtic’ National Quality and Productivity Network (NQPN). Among those selected to participate in the project were training institutions and service providers that support business management and skills support for the companies.

The release of statistics such as the National Productivity Statistics guides in the formulation of policy and priority areas such as those targeted by projects such as Africa Kaizen Initiative.

With these words, It is a great pleasure that I welcome you to the launch of the 2025 National Productivity Statistics Report, a comprehensive outline of South Africa ‘s productivity levels. The Productivity Statistics Report is an annual publication by Productivity SA and Provides insights into productivity trends across various economic sectors and industries in South Africa. The report assesses the impact of productivity changes on company sustainability and competitiveness and measures productivity trends annually.

The report has been a collaborative effort and draws on the expertise of the Department of Employment and Labour, Statistics South Africa, The South African Reserve Bank, and Productivity SA team.

Productivity SA also partners with  organisations such as the Internal Labour Organisation (ILO), and Institute of Management Development (IMD) various academic institutions that play a crucial role in enhancing the quality, relevance, and impact of productivity and competitiveness statistics.

These collaborations contribute to the development of a robust and informed approach to measuring and evaluating productivity and competitiveness with implications for economic policy, business strategy, and overall national development.

 In December 2021, the ILO, with the support of the Swiss and Norwegian government International Development Agency (NORAD), launched a global programme to help countries tackle the challenge of promoting productivity growth and decent work practices in an integrated and mutually reinforcing manner. The programme, known as the Productivity Ecosystem for Decent Work, is being piloted in three countries, namely, Ghana, South Africa, and Vietnam.

 As part of the project, the ILO assists Productivity SA to improve the quality of productivity statistics in South Africa and, as much as possible, disaggregate them by gender, sector (informal versus formal), business types (e.g., SMEs), and by provinces to capture spatial differences.

The advantage with this approach is that it helps answers key policy questions and stand to direct policy towards streamlined interventions that may assist in solution driven policies.

The adoption of enhanced, aggregate and industry-level measures of labour (LP) and multi-factor productivity (MFP) are aimed at allowing the country to examine key policy questions, such as:

•           What are the sectors contributing to productivity growth and better-quality jobs?

•           How is the sectoral growth pattern evolving – is productivity weakening in some sectors, growing in others?

South Africa’s long-term competitiveness and sustainable economic transformation requires accelerated and sustainable industrialisation, and without productivity growth, this will remain but a pipedream. The country ‘s investment across sectors like energy, agriculture, transportation, and manufacturing should be backed by value-adding information which also inform on the impact thereof on economic growth, job preservation and creation. This underscores the importance of Productivity and Competitiveness Measurement and Evaluation, which is one of Productivity SA’s mandate and key functions.

In compiling the statistics report, Productivity SA collects data from official sources, namely, Statistics South Africa and the South African Reserve Bank. The productivity indices are then calculated using this data. These indices comprise Capital labour ratio, Labour productivity, Capital productivity, Multifactor productivity, Compensation per employee as well as Unit labour cost. The indices are calculated for the total economy, the 3 main sectors of the economy, the 10 main industries as well as the 8 selected manufacturing sub sectors organised according to the Statistics South Africa’s Standard Industrial Classification (SIC) of all Economic Activities (2013). The methodology used in the calculation of the indices is in line with that recommended by the Organisation for Economic Cooperation and Development’s (OECD) Manual: Measuring Productivity (2017)

Productivity SA plays a pivotal role in ensuring that the economic revival of the country is premised on availability of key information and targets are set taking into consideration the areas of low and high performance. Productivity measures the ability of the economy to produce output, i.e., goods and services, using inputs, i.e., Labour input and Capital input.

An increase in productivity means that, among others, there is more output despite input remaining the same. The increase in Productivity that is not due to Labour and Capital inputs arises from technological progress and innovation, or multi-factor productivity. The Productivity measures of interest were primarily Labour productivity, Capital productivity, Multi-factor productivity, Capital Labour ratio as well as Unit labour cost as mentioned earlier.

Productivity SA aims to enable South Africa to achieve its National Development Plan objectives by 2030 and deliver on its Economic Reconstruction and Recovery Plan. Through the provision of productivity statistics, Productivity SA aims to ensure government, business, labour, and academia receives information that will create an enabling environment conducive for entrepreneurship and sustainable enterprises by supporting SMMEs, targeting those in the productive sectors to improve their competitiveness and sustainability.

The importance of productivity measurement in fostering a productive and competitive economy cannot be ignored. Productivity is at the centre of national output growth, bargaining councils’ discussions and imperative national objectives. Consequently, the main challenge for any economy is to create conducive conditions in which companies and employees can function more productively, thereby increasing competitiveness. Some of the important drivers of growth, include the need for an improvement in productivity. To facilitate the implementation of sound macroeconomic policies and micro economic reforms, capable and efficient government departments that offer quality support to businesses is a prerequisite.

The Productivity Statistics report therefore provides an assessment by Productivity SA of national productivity issues, as reflected by the performances of the various industrial sectors. The detailed productivity measurement reports also highlight the overall impact of productivity changes on sustainability and competitiveness of companies within all the economic sectors of South Africa.

In conclusion, the Productivity Statistics report serves not only as an assessment but as a guidepost for progress, informing interventions and fostering a culture of continuous improvement. Thank you for joining us on this journey towards a more productive and prosperous South Africa.