South Africa's GDP climbs 0.5% in Q1 2026 as manufacturing contracts

South Africa's economy expanded by 0.5% in the first quarter of 2026, marking a sixth straight quarter of growth and the strongest performance since the second quarter of 2025. The increase was driven by strong gains in finance, real estate and business services (+0.9%), agriculture, forestry and fishing (+3.9%), and modest improvements in trade, catering, accommodation, transport, storage and communication (+0.7% each). Net exports added 0.9 percentage points to GDP.

The manufacturing sector was the lone drag, shrinking by 0.8% quarter‑on‑quarter and removing 0.1 percentage point from overall growth. Five of its ten divisions reported declines, notably basic iron and steel and petroleum and chemical products. Unemployment rose to 32.7% and the economy lost roughly 345,000 jobs across formal and informal sectors. The United States has announced a 12.5% tariff on South African goods over forced‑labour concerns, posing a further challenge for exporters.

The government welcomed the quarterly expansion, citing a 1.9% year‑on‑year real GDP increase and promising to pursue structural reforms to boost growth and job creation.