South Africa’s economy contracted by 0.2% in the second quarter of 2026, reversing the 0.4% growth recorded during the first three months of the year.
Figures released by Statistics South Africa (Stats SA) on Tuesday showed that declines in trade, manufacturing and mining weighed heavily on economic activity.
The trade, catering and accommodation sector shrank by 1.9%, subtracting 0.2 percentage points from GDP. The decline was attributed to weaker activity in wholesale trade, motor trade, and food and beverages.
Manufacturing also contracted by 1.8%, with seven of its 10 divisions recording negative growth. Food and beverages, furniture and other manufacturing, as well as metals and machinery, registered the largest declines.
The mining and quarrying sector decreased by 3%, subtracting 0.1 percentage points from overall growth. Platinum group metals, manganese ore, gold and iron ore were the main contributors to the decline. However, some sectors recorded modest gains. Finance, real estate and business services expanded by 0.3%, supported by financial intermediation, insurance, pension funding and other business services. Transport, storage and communication grew by 0.9%, largely due to increased land transport activity.
General Government services expanded by 1%, driven mainly by higher employee compensation in provincial government, higher education institutions and other public entities. Personal services also increased by 0.6%, with growth recorded in community services and activities by other producers.
Meanwhile, household final consumption expenditure rose marginally by 0.4%. Spending increased on food and non-alcoholic beverages, recreation and culture, health and other goods and services. However, household expenditure declined in housing and utilities, transport, communication, clothing and footwear.