South Africa economy posts modest 0.8% GDP growth in Q2

South Africa’s economy grew by 0.8% in real GDP during the second quarter of 2025, showing modest recovery after just 0.1% growth in the first quarter.

Statistics South Africa reports that manufacturing, mining, and trade-related industries drove the expansion, while household consumption and a decline in imports supported growth on the demand side.

Supply Side: Eight Industries Expand

A total of eight industries recorded gains in the second quarter, notably:

• Manufacturing expanded by 1.8%, rebounding after two quarters of contraction. Growth was largely driven by the automotive, petroleum, chemical, rubber, and plastics sectors.
• Mining and quarrying posted a strong 3.7% increase, the fastest pace since Q1 2021, boosted by increased production of platinum group metals, gold, and chromium ore.
• Trade, catering & accommodation rose by 1.7%, reflecting higher consumer activity across retail, motor trade, accommodation, and food services.

Meanwhile, agriculture continued its positive trend, rising 2.5%, largely due to strong performance in horticulture and animal products.

Construction and Transport Lag Behind

Not all sectors shared in the growth:

• Construction contracted for the third consecutive quarter, hampered by weak activity in residential and non-residential buildings.
• Transport, storage & communication also declined, with land transport and transport support services weighing down the sector.

Demand Side: Households Boost Spending

On the expenditure side:

• Household consumption rose 0.8%, marking its fifth consecutive quarterly increase. The largest contributor was the miscellaneous category, which includes spending on insurance.
• Consumers also increased spending on restaurants & hotels and clothing & footwear. However, demand dropped for alcohol, tobacco, narcotics, and housing-related utilities.

Following an extended period of inventory reductions, the economy added R16.6 billion in stock, primarily in the mining, transport, and manufacturing sectors.

Imports and Exports Decline

• Imports fell by 2.1%, driven by lower demand for chemicals, machinery, mineral products, and vegetable products.
• Exports also weakened, primarily due to declines in base metals, vegetable products, and transport equipment (excluding large aircraft).

Outlook

Although growth in the second quarter shows resilience in key industries, structural challenges persist, especially in construction and logistics. Economists are closely monitoring how global commodity trends and local consumer confidence will influence the economy in the second half of the year.