South Africa's construction sector is experiencing a broadening recovery, with activity rising 5% quarter-on-quarter in the second quarter of 2026. This growth is attributed to solid gains in employment, building approvals, and building material production. The Afrimat construction index, compiled by economist Roelof Botha, increased 5% in real terms in the quarter, surpassing the 2.1% growth recorded by the economy as a whole.
The year-on-year picture remains subdued, with the index increasing 0.7%, slightly below the 0.9% expansion in GDP. However, Botha noted that the employment figures are particularly encouraging, with a rise of 95,000 from the second quarter of 2025. This growth in employment is a positive sign, especially considering the year-on-year decline in South Africa's total employment during the second quarter.
Construction employment increased 7.6% year-on-year and 3% quarter-on-quarter, while wholesale sales of construction materials rose 8.3% year-on-year and 6.6% quarter-on-quarter. The volume of building materials produced increased 2.5% year-on-year and 8.5% from the first quarter. These indicators demonstrate a consistent growth trend, which is a positive feature of the latest reading.
The value of building plans passed by larger municipalities rose 4.5% for the year and 14.8% for the quarter. Botha emphasized the importance of this consistency across indicators, stating that it is especially encouraging. The quarter-on-quarter increase in the volume of building materials produced is particularly noteworthy, as this indicator represents one of Afrimat's core activities.
Despite the positive growth, the recovery remains uneven. The value of construction works fell 2.2% quarter-on quarter, while construction value added fell 2.5%. The value of buildings completed dropped 4.7% over the quarter and 16.9% year-on-year. Construction salaries and wages fell 1.6% quarter-on-quarter and 4.5% year-on-year. Botha noted that the industry cannot yet be characterized as experiencing a broad-based recovery.
Botha expects construction activity to benefit from infrastructure spending and municipal reform through the remainder of this year and into next. The Metro Trading Services Reform Programme, supported by a $1bn loan from the New Development Bank, aims to improve the financial sustainability and operational performance of metropolitan municipalities. The construction pipeline is also expanding, with 110 projects worth about R396bn, up 71% from the R232bn recorded in its 2025 edition.
Afrimat CEO Andries van Heerden stated that the group is operating through one of its most challenging periods in over two decades, citing structural changes in the domestic economy and geopolitical uncertainty. However, the company's diversified portfolio has helped cushion the business, with its aggregates operation increasingly providing stability. Van Heerden noted that the group is seeing volume growth from infrastructure and construction activity, including rail maintenance, provincial road upgrades, and renewable energy projects.
Key points
- The construction sector grew 5% quarter-on-quarter in Q2 2026.
- Employment in the construction sector increased by 95,000 from Q2 2025.
- The construction pipeline is expanding, with 110 projects worth R396bn.
