South Africa’s economy contracted by 0.2% in the second quarter of 2026, ending six consecutive quarters of growth. Mining, manufacturing and trade were the biggest drags on output, while higher imports and weaker investment also weighed on economic activity.
South Africa’s economy contracted in the second quarter of 2026, with gross domestic product (GDP) falling 0.2% between April and June as weakness in mining, manufacturing and trade outweighed growth in several other parts of the economy.
The contraction, reported by Statistics South Africa (Stats SA) on Tuesday, marked the first decline after six consecutive quarters of economic growth. GDP had expanded by a revised 0.4% in the first quarter.
Mining was among the largest contributors to the downturn, with output falling 3.0% during the quarter. Stats SA said lower production of platinum group metals, manganese ore, gold and iron ore contributed to the decline.
Manufacturing output also weakened, declining 1.8% and recording its third consecutive quarterly contraction. Seven of the sector’s 10 manufacturing divisions reported negative growth, with food and beverages, furniture and other manufacturing, as well as basic iron and steel, non-ferrous metals, metal products and machinery among the biggest negative contributors.
The trade industry, which includes wholesale and motor trade as well as food and beverage services, contracted 1.9%. Stats SA said the decline contributed 0.2 percentage point to the overall GDP contraction.
The weakness was not broad-based across the economy. Transport, storage and communication activity increased 0.9%, while construction grew for a second consecutive quarter. Agriculture also recorded its seventh straight quarterly increase, supported by stronger production of horticultural products and field crops.
On the expenditure side, household consumption increased 0.4%, supported by spending on food and non-alcoholic beverages, recreation and culture, and healthcare. However, imports jumped 4.9%, while capital formation declined for a second consecutive quarter, reflecting weaker investment in areas including construction works and transport equipment.
The latest figures highlight the uneven nature of South Africa’s economic recovery. While some sectors continued to expand, weakness in major productive industries such as mining and manufacturing placed significant pressure on overall output.
Reuters reported that the downturn also reflected the effects of the broader global environment, including the economic impact of the conflict involving Iran, alongside persistent domestic constraints affecting key industries.
The second-quarter contraction will increase attention on the outlook for South Africa’s economy as policymakers assess whether the weakness is temporary or signals a broader loss of momentum.
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