GDP decline exposes South Africa’s uneven growth and jobs crisis

South Africa's economic growth has slowed in the second quarter of 2026, with the economy contracting by 0.2% between April and June. Key industries such as mining, trade, and manufacturing contributed to this decline. The South African labour market also saw job losses, with employment falling by 16,000 to 16.74 million people.

Meanwhile, the number of unemployed individuals rose by 345,000 to 8.5 million, raising the official unemployment rate to 33.6%. Mining activity shrank by 3.0%, losing 26,000 jobs, while manufacturing experienced its third consecutive decline, shedding 15,000 positions. Agriculture, however, saw a seventh consecutive quarterly increase, driven by better horticultural and field crop production, though it still lost 15,000 jobs.

Despite this uneven growth, the economic and employment figures do not always align. For instance, the trade sector contracted by 1.9%, but employment actually rose by 70,000. The Statistician-General, Risenga Maluleke, noted that weaker trade was due to declining wholesale trade, motor trade, and food and beverages. Meanwhile, construction added 39,000 jobs and trade saw a 70,000 job increase.

The decline in trade was driven by weaker wholesale trade, motor trade, and food and beverages, while retail and accommodation remained stronger. The country's economic growth is constrained by a 4.9% increase in imports and a second consecutive quarterly decline in capital formation. Factors such as the Middle East conflict and rising global oil prices are contributing to this weakness.

Dr Lerato Ntuli, an economist at Anchor Capital, attributed the weaker GDP performance to the Middle East conflict and higher fuel and crude oil prices. The decline in GDP is also affecting people's lives, with political leaders urging the government to take quicker and more decisive action on reforms to stimulate investment and create employment.