The manufacturing sector is critically important for the country's growth and development. Manufacturing drives innovation, productivity and competitiveness. Over the years, South Africa's industrial policies and low electricity prices have favoured capital intensive industries, such as steel and petrochemicals. However, recently a shortage of skilled workers, decreasing external demand and rising domestic costs have accentuated competitive pressures in the industry and reduced employment. In terms of the NDP, binding constraints to industrial expansion should be eliminated, including the supply of skilled labour, reliability of electric supply, low productivity levels and high logistics costs. The country faces complex challenges, including high unemployment, shortcomings in public education, a weak skills base and a resource-intensive economy bias, high levels of inequality and spatial distribution patterns that raise the costs of living and doing business.