What South Africa’s economic headlines told us this week
Weak economic growth, pressure on manufacturing and rising unemployment continue to weigh on South Africa, although July payment data points to some resilience in the economy.
This week's economic headlines in South Africa offered a mixed picture. Official unemployment rose to 33.6%, while economic activity showed signs of recovery. Manufacturing and mining sectors continue to face challenges, and economists warn that stronger growth is needed to reduce unemployment. The Quarterly Labour Force Survey revealed an increase in the number of unemployed people to about 8.5 million, while employment fell by 16,000.
KPMG South Africa's lead economist, Frank Blackmore, stated that higher economic growth is necessary to provide job opportunities for the unemployed. Despite the unemployment rate, the PayInc Economic Index rose to 102.7 in July, indicating an improvement in economic activity after declining in the previous two months. Lower fuel prices helped ease the burden on households and businesses, but the outlook remains uncertain due to potential volatility in international oil markets.
Manufacturing output declined by 1.5% quarter-on-quarter, with food and beverages contributing the most significant negative impact. The sector continues to struggle with high input costs, logistics problems, and domestic constraints. Meanwhile, South Africa's mining sector saw a sharp increase in mineral sales, rising 27.2% year on year due to higher commodity prices.
However, production declined by 4%, with platinum group metals, coal, and iron ore being the biggest contributors to the decline. The value of South Africa's mineral sales rose, but it does not necessarily mean that the country is producing more. The tourism sector welcomed a record 10.5 million international tourists in 2025, contributing to about 1.8 million direct and indirect jobs and 9% of GDP.
The challenge now lies in ensuring that the spending generated by tourists reaches local businesses, entrepreneurs, and communities, transforming tourism into a more consistent source of economic activity. Artificial intelligence is being seen as a potential driver of productivity gains for South African businesses. However, the question remains whether these gains will translate into investment and expansion or simply allow companies to do more with fewer people.
Written by urgent.news from IOL's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
