Africa-Press – South-Africa. South Africa’s construction industry has been in decline for the past nine years, with the sector’s size eroding from R156 billion in 2016 to R99.1 billion in 2025.
This marks a decline of R56.9 billion in less than a decade, with South African infrastructure and construction companies paying the price.
Over the same period, South Africa has also seen a severe decline in fixed investment, which has severely hampered economic growth.
Statistics South Africa (Stats SA) recently released the country’s GDP data for the fourth quarter of 2025, which showed that the economy grew by an estimated 1.1% last year.
While a significant improvement from 2024’s 0.5% and 2023’s 0.8%, this level of growth remains far below what is needed to meaningfully reduce unemployment and enhance South Africans’ living standards.
One component of South Africa’s GDP is the construction industry, which has either not added to growth at all or detracted from economic expansion over the past decade.
In fact, Stats SA’s data showed that construction has been a net negative contributor to GDP growth for seven of the past nine years. For the other two years, it contributed nothing.
It was not always like this. Construction was one of South Africa’s strongest sectors, posting consistent growth between 2000 and 2015.
However, over the past decade, the industry has faced several challenges that have not only halted its growth but also led to a decline.
In the Construction Industry Development Board’s latest annual report for the 2024/25 fiscal year, Public Works and Infrastructure Minister Dean Macpherson summarised these challenges.
“Contractor underperformance, project delays, and infrastructure vandalism continue to frustrate delivery,” he said.
“The rise of criminal networks – the so-called ‘Construction Mafia’ – remains a direct threat to safety, investment, and jobs.”
While the minister noted that some work has been done to address these challenges, he said more must be done to safeguard construction sites and restore credibility across the built environment.
The decline in South Africa’s construction industry over the past decade is evident in the graphs below.
Data source: Stats SA, using constant 2015 prices, seasonally adjusted and annualised
Data source: Stats SA, using constant 2015 prices and seasonally adjusted
Industry in decline – but there’s hope
In an opinion paper published by the Development Bank of Southern Africa’s Masedi Sesele, he explains that one of the main causes of the construction industry decline is the Covid-19 pandemic.
The pandemic, he said, led to job losses for construction workers, revenue losses for industry stakeholders, and various supply chain disruptions.
“Several construction firms had to shut down operations owing to the impact of the financial losses incurred during the lockdown,” he said.
“The few that are still in operation have had to review their modus operandi to comply with Covid-19 regulations.”
Sesele explained that, similar to many other industries, “the construction sector was obviously not equipped for a pandemic of the Covid-19 magnitude”.
However, he said there are some lessons to be learned from this experience, with some positives stemming from the pandemic, such as disruptive technologies.
Sesele said these technologies should continue to be harnessed and improved upon to ensure a more productive and innovative industry.
However, in the meantime, the decline in South Africa’s construction industry has had a marked effect on the country’s former construction giants.
Notably, construction giant Murray & Roberts Holdings was placed under final liquidation in late 2025, after struggling for years to stay afloat.
The industry’s collapse is also reflected in South Africa’s collapsing infrastructure, as the government has failed to adequately invest in maintaining and upgrading infrastructure.
With the government having committed R1 trillion to infrastructure investment over the coming years and inviting greater private sector participation, it is hoped that this could be the start of a turnaround.
Stats SA’s latest GDP data showed that South Africa’s gross fixed capital formation increased by 1.3% in the fourth quarter of 2025, marking its second consecutive quarter of expansion.
This is a positive sign for growth going forward, though a lot more needs to be done to turn the fortunes of South Africa’s construction industry around.
Data source: Stats SA, using constant 2015 prices and seasonally adjusted
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