South Africa’s GDP Grows 0.8% in Q2 2025, Driven by Mining and Manufacturing

South Africa’s economy showed stronger momentum in the second quarter of 2025, recording real GDP growth of 0.8%, according to figures released by Statistics South Africa (Stats SA) on Tuesday. This marks a notable improvement from the marginal 0.1% expansion recorded in the first quarter, signalling gradual but uneven recovery across key sectors.

Mining Sector Lifts Growth

The mining and quarrying industry delivered the biggest boost, growing by 3.7% and adding 0.2 of a percentage point to the quarterly GDP. Platinum group metals, gold, and chromium ore were the largest positive contributors, reflecting improved global demand and relatively stable commodity prices.

Mining remains one of South Africa’s most strategic industries, accounting for substantial export earnings and employment. Analysts note that sustained growth in this sector could help offset weaknesses elsewhere in the economy.

Manufacturing and Trade Perform Strongly

The manufacturing industry expanded by 1.8%, also contributing 0.2 percentage points to GDP. Seven out of ten divisions posted positive growth, led by petroleum and chemical products, rubber and plastics, and motor vehicles and parts. Manufacturing is a key industrial driver, and the sector’s rebound suggests improving production volumes and supply chain stability.

The trade, catering, and accommodation industry also performed well, increasing by 1.7% and contributing another 0.2 percentage points. Stats SA attributed this to heightened retail activity, strong motor trade, and higher demand for accommodation, food, and beverages — reflecting both domestic spending and seasonal tourism activity.

Weaknesses in Transport and Construction

Despite the overall growth, some industries registered contractions. The transport, storage, and communication sector declined by 0.8%, largely due to lower activity in land transport and transport support services.

The construction industry shrank by 0.3%, with decreases reported in both residential and non-residential building projects. Analysts say persistent structural challenges, including high interest rates, weak investor confidence, and municipal infrastructure bottlenecks, continue to weigh down the sector.

Household Spending Trends

Expenditure on GDP also strengthened, with Household Final Consumption Expenditure (HFCE) rising 0.8% and contributing 0.6 of a percentage point to overall growth.

Spending increases were most pronounced in:

• “Other” goods and services (up 2.6%, contributing 0.3 percentage points)

• Restaurants and hotels (up 4.8%, contributing 0.2 percentage points)

• Clothing and footwear (up 3.4%, contributing 0.2 percentage points)

• Transport (up 0.7%, contributing 0.1 percentage points)

• Communication (up 1.1%, contributing 0.1 percentage points)

On the negative side, expenditures on housing, utilities, and alcoholic beverages declined, reflecting the impact of elevated living costs and reduced discretionary spending in some categories.

Outlook for the Remainder of 2025

The 0.8% growth in Q2 represents an encouraging improvement for the South African economy, but structural risks remain. Energy constraints, policy uncertainty, and weak global demand continue to pose challenges. Still, strong performances in mining, manufacturing, and trade provide a base for cautious optimism.

Economists suggest that if key infrastructure reforms and energy supply improvements continue, South Africa could consolidate these gains in the second half of 2025. Household spending resilience, despite high inflationary pressures, also indicates underlying consumer demand that could support further growth.