South Africa’s embattled construction industry is showing tentative signs of a turnaround, recording its third consecutive quarter of positive growth despite persistent macroeconomic headwinds.
The Afrimat Construction Index (ACI), a composite measure of sector activity compiled by economist Dr. Roelof Botha, edged up 0.3% year on year in the first quarter of 2026. The reading marks the first time the seasonally adjusted index has expanded for three straight quarters since the 2020 recession, signaling a rare period of stability for a sector long plagued by underinvestment and infrastructure backlogs.
“The most impressive aspect of the latest ACI reading is the stability that has crept in for two key indicators – the value of non-residential buildings completed, and the value of construction works,” Botha said in a statement accompanying the release.
The marginal headline growth belies a robust performance in employment. The sector added 74,000 jobs compared to the first quarter of 2025, accounting for 11% of all new employment created nationwide over the period. The surge highlights the industry’s outsized role in labor absorption, even as it contributes just 5.5% of total gross domestic product.
Five of the index’s ten indicators recorded positive year-on-year growth, driven by gains of more than 5% in both the value of construction works completed and the value of completed buildings. Higher building completions and improving retail sales of building materials also supported the uptick. Of the four indicators that declined, three registered drops of less than 2%, pointing to a relatively broad-based stabilization.
Forward-looking metrics offer further optimism. Overall construction tender activity jumped 11.4% year-on-year in the first four months of 2026, according to data from research firm Industry Insights, with KwaZulu Natal, the Eastern Cape, and the North West provinces leading the pipeline expansion.
The sector’s nascent recovery has been heavily supported by a pause in monetary tightening, and industry players are betting on further relief from the South African Reserve Bank later this year. Botha noted that global geopolitical shifts, including a recent peace accord between the U.S. and Iran, could reopen the Strait of Hormuz, drive down global oil prices, and temper domestic inflation.
“A lowering of the prime rate will go a long way to restoring profitability in the construction sector, which is sensitive to the cost of capital especially in residential construction,” Botha said.
As mid-tier indicators improve, corporate consolidation in the sector is advancing. Mid-tier miner and materials producer Afrimat Ltd. recently wrapped up the R215 million ($11.7 million) disposal of select aggregate quarries and readymix concrete plants. The sale is part of regulatory conditions tied to its larger acquisition of Lafarge South Africa Holdings.
Afrimat CEO Andries van Heerden said the company is doubling down on its operational sweet spot. “The group remains focused on building a sustainable South African business anchored in construction materials and bulk commodities. Both of these involve open-pit mining, the core of Afrimat’s operations.”
Van Heerden also cheered a recent decision by the National Energy Regulator of South Africa to approve a lower electricity tariff for the ferrochrome industry, which is expected to catalyze broader industrial activity. “It also means that our Nkomati Anthracite Mine is ramping up to full production over the next six months,” he added.