Construction output in South Africa is expected to contract by 0.5% in real terms in 2025, owing to headwinds such as weak economic activity, high inflation, elevated construction material prices, decrease in the construction of residential buildings, and weak civil construction activity. According to the Statistics South Africa (Stats SA), the country’s construction material price index (CMPI) rose by 6.1% year on year (YoY) in the 2024, preceded by annual increase of 6.6% in 2023. Furthermore, the construction material price index for civil engineering rose by 5.4% YoY in 2024, following annual growth of 4.4% in 2023. Moreover, the construction industry’s value-add fell by 2% YoY in Q4 2024, following YoY decline of 2.9% in Q3 and 6.9% in Q2 2024, preceded by annual decline of 5.1% in 2024, according to Stats SA.
The analyst expects South Africa’s construction industry to rebound and record an average annual growth of 3.5% between 2026 and 2029, supported by public and private sector investments in renewable energy projects, coupled with government investment in the country’s transportation infrastructure. Growth will also be supported by the country’s target to increase the share of renewable energy to 42% of the total energy mix by 2030 compared to 22% in 2024 and reach net zero carbon emissions by 2050. In March 2025, during the EU-South Africa summit in Cape Town, the European Union announced ZAR95.6 billion ($5.1 billion) investment to support South Africa’s energy transition. This funding is a part of the Global Gateway program, which aims to strengthen strategic infrastructure and boost international investments in the country. This investment will help to accelerate the shift towards cleaner and more sustainable energy. Growth over the forecast period will also be supported by the country’s FY2025-26 Budget, in which the government is estimated to spend ZAR2.6 trillion ($137.7 billion), an increase of 7.8% compared to the expenditure of ZAR2.4 trillion ($127.7 billion) in the revised estimates (RE) of the FY2024-25 Budget. Additionally, in March 2025, the government announced an investment of ZAR1.03 trillion ($55 billion) for public infrastructure projects by state-owned companies, other public entities, and national, provincial and local government by 2028.
The Construction in South Africa - Key Trends and Opportunities to 2029 (Q1 2025) report provides detailed market analysis, information and insights into South Africa's construction industry, including:
The analyst expects South Africa’s construction industry to rebound and record an average annual growth of 3.5% between 2026 and 2029, supported by public and private sector investments in renewable energy projects, coupled with government investment in the country’s transportation infrastructure. Growth will also be supported by the country’s target to increase the share of renewable energy to 42% of the total energy mix by 2030 compared to 22% in 2024 and reach net zero carbon emissions by 2050. In March 2025, during the EU-South Africa summit in Cape Town, the European Union announced ZAR95.6 billion ($5.1 billion) investment to support South Africa’s energy transition. This funding is a part of the Global Gateway program, which aims to strengthen strategic infrastructure and boost international investments in the country. This investment will help to accelerate the shift towards cleaner and more sustainable energy. Growth over the forecast period will also be supported by the country’s FY2025-26 Budget, in which the government is estimated to spend ZAR2.6 trillion ($137.7 billion), an increase of 7.8% compared to the expenditure of ZAR2.4 trillion ($127.7 billion) in the revised estimates (RE) of the FY2024-25 Budget. Additionally, in March 2025, the government announced an investment of ZAR1.03 trillion ($55 billion) for public infrastructure projects by state-owned companies, other public entities, and national, provincial and local government by 2028.
The Construction in South Africa - Key Trends and Opportunities to 2029 (Q1 2025) report provides detailed market analysis, information and insights into South Africa's construction industry, including:
- South Africa's construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in South Africa's construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Scope
This report provides a comprehensive analysis of the construction industry in South Africa. It provides:
- Historical (2020-2024) and forecast (2025-2029) valuations of the construction industry in South Africa, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
- Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
- Assess market growth potential at a micro-level with over 600 time-series data forecasts
- Understand the latest industry and market trends
- Formulate and validate business strategies using the analyst's critical and actionable insight
- Assess business risks, including cost, regulatory and competitive pressures
- Evaluate competitive risk and success factors
Table of Contents
1 Executive Summary2 Construction Industry: At-a-Glance6 Construction Market Data
3 Context
4 Construction Outlook
5 Key Industry Participants
7 Appendix
List of Tables
List of Figures
