The manufacturing sector’s ability to attract young, skilled people would be a determining factor in its success going forward, business software provider Isah International director Peter van Harten said on Friday.

He added that despite its current ailing state, the local manufacturing sector still held immense potential.

Van Harten was addressing delegates at a business breakfast preceding member of the executive committee for economic development Qedani Mahlangu’s Budget Vote address on Friday.

He pointed out that South Africa’s small manufacturing businesses were facing real danger, owing to the country’s adverse economic conditions, while disappointing employment in the sector during the first quarter added to the sombre picture.

However, the sector still contributed 14.6% to South Africa’s gross domestic product and could have a multiplier effect on the country’s economy.

“To bring manufacturing back, long-term, job-inclusive growth of 10% a year is required,” Van Harten noted.

He suggested that the way forward for local manufacturing companies was to establish a clear, innovative business strategy.

“Flexible information technology systems are needed to enable and strengthen companies’ strateges, while reducing costs and improving their decision-making capabilities,” he said.

Other challenges weighing heavily on manufacturing growth were an infrastructure deficit and the increasing focus in clean energy.