South Africa’s construction sector recorded a 5% quarter-on-quarter rebound in the second three months of 2026, while employment rose by 95,000 year-on-year, according to the Afrimat Construction Index (ACI).
The index outperformed the economy after South Africa’s GDP contracted by 0.2% in the second quarter. The index was released on Monday and compiled by economist Dr Roelof Botha, Economic Advisor to Betterbond, on behalf of mining and industrial minerals group Afrimat.
Botha said the ACI increased by 0.7% year-on-year, compared with GDP growth of 0.9% over the same period.
“Even though the year-on-year increase of 0.7% was marginally lower than the 0.9% increase in GDP, it is encouraging that employment in the construction sector has increased by 95,000 since the second quarter of 2025,” Botha said.
He said the employment increase was significant against the background of a year-on-year decline in South Africa’s total employment during the quarter.
The ACI is expressed in real terms, meaning it is adjusted for inflation.
Construction indicators improve
Botha said four indicators recorded growth rates above the latest consumer price inflation rate of 4.3% on both a quarter-on-quarter and year-on-year basis:
- wholesale trade sales of construction materials;
- construction employment;
- the value of building plans passed by larger municipalities; and
- the volume of building materials produced.
The volume of building materials produced increased by 8.5% quarter -on-quarter. Real sales of building materials rose by 7% compared with the first quarter.
Although activity levels remain subdued, the ACI’s seasonally adjusted reading has remained above its 2011 base level of 100 for four consecutive quarters.
Botha said this pointed to a recovery from the effects of state capture and the Covid-19 pandemic.
Five of the 10 indicators recorded positive year-on-year growth, while two of the remaining five declined by less than 2%. On a quarter-on-quarter basis, six indicators increased in real terms.
Reform and infrastructure investment
Botha said construction activity could benefit from several potential growth drivers during the rest of 2026 and into 2027.
These include the Metro Trading Services Reform Programme, supported by a $1 billion loan (R16bn) from the New Development Bank. The government-led programme aims to improve the governance, financial sustainability and operational performance of municipal trading services in metropolitan municipalities, particularly water and sanitation, electricity and energy, and solid waste management.
Industry Insights has reported that South Africa’s 2026 Construction Book lists 110 projects worth approximately R396bn, well up from R232bn in the 2025 edition.
Botha also said lower oil and fuel prices could reduce inflation and create room for further interest-rate cuts.
Afrimat CEO Andries van Heerden said the group remained committed to building a sustainable South African business.
He described the past year as one of the most challenging in the company’s history, citing structural shifts in the local economy and geopolitical uncertainty.
“Market conditions are showing encouraging signs,” Van Heerden said, citing increased spending on rail maintenance, provincial roads, water infrastructure, residential and commercial construction, and renewable-energy projects.
As a national aggregates supplier, Afrimat was positioned to participate in projects across the country, he said.
“Our exposure to numerous small and medium-sized contracts, rather than relying on a handful of large projects, continues to support activity across our quarry footprint,” he said.
Botha also said capital formation by national government and public corporations had increased sharply in the second quarter.
yogashen.pillay@nationalmg.co.za