The economy has stepped backwards as GDP declined 0.2% in the second quarter of 2026.
The decline has reversed the 0.4% growth recorded in the first quarter, also ending a streak of six consecutive quarters of economic growth.
It has been widely driven by weaker activity in trade, manufacturing, and mining, while a sharp rise in imports and subdued investment constrained growth on the expenditure side, revealed Stats SA on Tuesday.
Lower activity in platinum group metals (PGM), manganese ore, gold and iron ore dropped the mining and quarrying sector by 3%.
There was a 1.9% decline in trade, catering and accommodation industry due to weaker activity in wholesale and motor trade, as well as food and beverages services.
Manufacturing is considered to be in recession after at least three quarters of economic decline recording 1.8% in period. Seven of 10 manufacturing divisions showed a decline and the food and beverages was the main negative contributor.
READ: South African manufacturing sentiment worsens in June, ABSA PMI shows
However, some parts of the economy continued to grow as finance, real estate and business services increased by 0.3%.
“Seven industries were stronger in the second quarter, but their upward momentum was not enough to lift overall growth into positive territory. Transport and communication expanded by 0.9%, driven higher by a rise in land transport.
“Construction grew for a second straight quarter, registering increases in residential and non-residential buildings. Agriculture recorded its seventh consecutive increase with the production of horticultural products and field crops,” reads the report.
READ: How South Africa’s agriculture has changed 32 years after apartheid
Graham Charters, Build One South Africa (BOSA) spokesperson, said the data exposes an economy that is rather going backwards. He noted that the rand dropped 0.2% ahead of the GDP announcement, which he said raised concern about the state of the economy.
“The economy determines whether families can afford bread and electricity, whether parents can pay school fees, whether entrepreneurs can employ another person, and whether young South Africans can find a job,” said Graham.
- South Africa's GDP declined by 0.2% in the second quarter of 2026, reversing a 0.4% growth in the first quarter and ending six consecutive quarters of growth.
- The decline was driven by weaker activity in trade, manufacturing, and mining, along with a sharp rise in imports and subdued investment.
- The mining and quarrying sector fell by 3% due to lower activity in platinum group metals, manganese ore, gold, and iron ore.
- Manufacturing declined by 1.8%, with seven out of ten manufacturing divisions showing decrease, particularly in food and beverages, indicating a recession in the sector.
- Despite overall decline, finance, real estate, business services, transport and communication, construction, and agriculture sectors recorded growth in the second quarter.
It has been widely driven by weaker activity in trade, manufacturing, and mining, while a sharp rise in imports and subdued investment constrained growth on the expenditure side, revealed Stats SA on Tuesday.
Lower activity in platinum group metals (PGM), manganese ore, gold and iron ore dropped the mining and quarrying sector by 3%.
READ:
However, some parts of the economy continued to grow as finance, real estate and business services increased by 0.3%.
“Seven industries were stronger in the second quarter, but their upward momentum was not enough to lift overall growth into positive territory. Transport and communication expanded by 0.9%, driven higher by a rise in land transport.
“Construction grew for a second straight quarter, registering increases in residential and non-residential buildings. Agriculture recorded its seventh consecutive increase with the production of horticultural products and field crops,” reads the report.
READ: How
Graham Charters, Build One
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