Economic development in the Western Cape is characterised by a broad sector base, with good growth potential in several major sectors, a range of significant niche sectors and a number of large new investment projects.

Rapidly decreasing communication cost levels mean the disadvantages of Cape Town’s distance of 1 500 kilometres south of the economic hub of Gauteng and several thousand kilometres from European, American and Asian centres is less and less significant. In line with worldwide trends, South Africa’s export-oriented industries tend to shift towards port cities and coastal industrial belts – the drop in import duties and the establishment of Saldanha Steel as a basis for Western Cape heavy industry add more momentum to this shift. The Western Cape has an open economy with foreign trade making up close to 30% of the gross regional product. The province’s exports have traditionally been dominated by primary products such as fruit, fish and vegetables, but with beneficiation adding increasingly higher value.

Manufacturing is the second biggest sector in the Western Cape after the financial services sector and contributed 15% to the South African manufacturing sector output of R300 billion in 2012.

The manufacturing sector in the Western Cape attracts large amounts of inward investment, and enjoys substantial state assistance as an employment-creating industry. Manufactured products include heavy-duty industrial equipment, vehicle parts and electrical equipment. Exporters in this sector have experience in supplying large quantities to buyers from developed and developing countries.