Economy stalls as GDP slips 0,2% after six quarters of growth
Mining, trade and manufacturing fell in the second quarter of 2026, but agriculture and construction kept growing, here is what it means for households.
South Africa’s economy contracted by 0,2% in the second quarter of 2026, ending six consecutive quarters of growth, according to Statistics South Africa (Stats SA).
The decline, covering April to June, was driven by weaker output in mining, trade and manufacturing, while a sharp rise in imports and subdued investment held back growth on the demand side. The quarter-on-quarter figures are seasonally adjusted and measured in real terms at constant 2015 prices, Stats SA said in its gross domestic product release.
The figures were published on 8 September 2026 and are available on the Stats SA website.
Three industries record losses
Mining activity contracted by 3,0%, led by declines in the production of platinum group metals, manganese ore, gold and iron ore.
Trade wobbled after six straight quarters of growth, shrinking by 1,9%. Stats SA attributed the fall to weaker wholesale trade, motor trade and the food and beverages industry. Consumer activity remained relatively upbeat, with stronger retail trade and accommodation. Motor trade was dragged lower by softer fuel sales, although new vehicle sales continued to strengthen.
Manufacturing recorded its third consecutive decline. Seven of the ten manufacturing divisions posted negative growth rates. The largest negative contributors were food and beverages. Furniture and ‘other’ manufacturing. And basic iron and steel, non-ferrous metal products, metal products and machinery.
Seven industries grew in the quarter, but not enough to lift overall growth into positive territory. Transport and communication expanded by 0,9%, helped by a rise in land transport. Construction grew for a second straight quarter, with increases in residential and non-residential buildings. Agriculture recorded its seventh consecutive increase, lifted by horticultural products and field crops.
Imports surge as investment pulls back
Imports rose sharply by 4,9% in the second quarter, largely influenced by increased trade in machinery and electrical equipment and mineral products. Exports expanded by 0,9%, led by higher exports of pearls, precious and semi-precious stones and precious metals.
Capital formation, investment in infrastructure and other fixed assets, declined for a second consecutive quarter, with construction works and transport equipment the largest negative contributors. Public corporations and private business enterprises both pulled back on capital formation. General government, by contrast, recorded an increase.
Household consumption expenditure grew by 0,4%. Consumers spent more on food and non-alcoholic beverages. Alcoholic beverages, tobacco and narcotics. And restaurants and hotels. That matches the rise in retail trade and accommodation on the production side of the economy.
The quarter recorded a net build-up in inventories of R8,8 billion. Although trade and manufacturing produced less, reducing supply, the two industries added to their stockpiles in response to lower demand. The personal services industry also contributed positively. Six industries drew from their stockpiles. Mining was the most notable, withdrawing inventories valued at R10,9 billion.
Why it matters
The contraction ends a run of six quarterly increases, and the detail matters more than the headline number. Mining’s 3,0% fall is concentrated in platinum group metals, manganese, gold and iron ore, commodities that employ large workforces and earn foreign exchange. Manufacturing’s third consecutive decline points to pressure that has outlasted a single quarter.
For households, the picture is mixed. Consumption expenditure still grew by 0,4%, and retail trade and accommodation were stronger. But the growth in spending on food, beverages and restaurants suggests consumers are prioritising essentials and everyday services. With capital formation falling for a second quarter, businesses and public corporations are holding back on the kind of long-term investment that supports future jobs and capacity.
There are also clear pockets of strength. Agriculture has now grown for seven consecutive quarters, construction for two. Transport and communication expanded. These are the sectors to watch for signs of whether the second-quarter dip is a pause or the start of a weaker trend.
What happens next
Stats SA will publish the third-quarter GDP figures later this year, which will show whether the decline was a single-quarter setback or the beginning of a slowdown. In the meantime, the agency’s monthly indicators, including mining and manufacturing production, retail sales and the quarterly labour force survey, will give an earlier read on how the economy is tracking.
The full GDP release for the quarter ended June 2026, including the media presentation and Excel files, is available on the Stats SA website at https://www.statssa.gov.za/?p=19893.
