JOHANNESBURG, South Africa – South Africa’s construction industry is showing tentative signs of stabilisation after several years of weak performance, according to the latest Afrimat Construction Index (ACI), which recorded modest growth in early 2026.
The index rose by 0.3% year-on-year in the first quarter, reflecting gradual improvements in building activity, employment and materials demand across the sector.
Gradual Recovery Takes Shape
The Afrimat Construction Index, compiled quarterly by economist Roelof Botha for Afrimat, indicates that the sector may be entering a more stable phase after prolonged volatility.
This marks the third consecutive quarter of improvement in the seasonally adjusted index, the first such streak since the economic disruption caused by the 2020 downturn.
Analysts say the trend suggests a slow but steady recovery rather than a sharp rebound in construction activity.
Employment and Building Activity Improve
One of the strongest positive signals in the latest data is job creation within the sector.
Construction employment increased by approximately 74,000 jobs year-on-year, making the industry one of the more significant contributors to employment growth in the broader South African economy.
Non-residential building activity and completed construction works also showed signs of stability, helping to support overall index performance.
Although the sector remains under pressure, half of the index’s ten indicators recorded year-on-year gains, while most declines were relatively small.
Tender Activity Strengthens Across Provinces
A key driver of optimism has been improved construction tender activity.
Between February and March 2026, tender volumes recorded double-digit growth, while overall activity in the first four months of the year rose by more than 11% compared with the same period in 2025.
Provincial gains were particularly strong in KwaZulu-Natal, the Eastern Cape and the North West, reflecting increased public and private sector project pipelines.
Economists say rising tender activity is an important early indicator of future construction output.
Interest Rates and Investment Sentiment
Lower borrowing costs have also supported the sector, easing financial pressure on developers and contractors.
Market expectations of further monetary easing by the South African Reserve Bank could provide additional momentum if inflation remains under control.
Residential construction is expected to be among the main beneficiaries of improved credit conditions.
At the broader macroeconomic level, South Africa recorded 1.4% year-on-year GDP growth in the first quarter of 2026, while investor sentiment has improved slightly due to a stable currency and more positive sovereign outlooks.
Afrimat Focuses on Infrastructure and Aggregates
Afrimat continues to play a central role in supplying materials for infrastructure development across the country.
Chief executive Andries van Heerden said demand for aggregates and ready-mix concrete has remained steady, supported by ongoing infrastructure projects.
These include road rehabilitation, residential developments, wastewater treatment upgrades, renewable energy projects and industrial construction across multiple provinces.
The company has also adjusted its portfolio following strategic asset disposals linked to its acquisition of Lafarge South Africa Holdings, aiming to strengthen its balance sheet and operational focus.
Energy Sector Developments Support Outlook
Additional optimism comes from regulatory changes in energy-intensive industries, including reduced electricity tariffs for ferrochrome producers.
Improved energy pricing is expected to support industrial output and protect jobs, particularly in construction-linked sectors.
Afrimat also expects increased production from its mining operations, including the ramp-up of its Nkomati Anthracite Mine, which could further support construction material supply chains.
Outlook: Stabilisation Before Full Recovery
While the Afrimat Construction Index does not yet signal a full recovery, the data suggests that South Africa’s construction sector is gradually regaining stability.
Improving tender activity, rising employment and supportive interest rate conditions are expected to underpin modest growth in the coming quarters.
However, economists caution that sustained recovery will depend on consistent investment, infrastructure spending and broader economic stability.
For now, the sector appears to be shifting from prolonged contraction toward cautious stabilisation.